Prior to the crisis, the 29 most systemically important global banks benefited from just over one notch of uplift from the ratings agencies due to expectations of state support. Today, those same banks benefit from around two or three notches of implied support on average.
The implicit subsidy estimated by the Commission is in the range of EUR 72-95 billion and EUR 59-82 billion in 2011 and 2012, respectively. In relative terms, this amounts to 0.5 % to 0.8 % of annual EU GDP and between one-third and one-half of the banks' profits.
The evidence also points out that larger banks benefit disproportionally from government support. Government support is higher for banks headquartered in Member States with high sovereign ratings and for banks with high levels of wholesale/interconnected activities.
European Commission, Economic Review of the Financial Regulation Agenda, 15 May 2014
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