The Clearing House Association released the first working paper in a series that will focus on key issues relating to the Value of Large Banks. With increased focus by public policymakers on the role and value of large financial institutions to U.S. consumers and the economy, The Clearing House has developed a series of educational briefing papers to address whether large banks enjoy unfair economic benefits as a result of express, direct or implied government policies. The Clearing House has undertaken the series to correct the misconception amongst those who argue that large banks are reaping an unfair cost-of-funding benefit due to a market perception that they will be bailed out by the government should a future crisis emerge. 

The working paper series provides a detailed overview of the broad range of issues that policymakers must consider when asking, and trying to accurately answer, this complex question. This first working paper, Identifying the Right Question, discusses the differences between the size of financial institutions, and highlights the need to meaningfully understand the role of large banks in the financial system, the need to distinguish between advantages resulting from unfair government support and those resulting from natural market factors, and the need to account for all government policies including additional costs borne by large banks.