A good portion of the expansion, however, was at large
banks (those with assets of $5 billion or more).
Moreover, the ratio of tier 1 capital to risk-adjusted assets was much lower at large
banks, mainly because of the greater reliance by these banks on subordinated debt (chart 10).
Under the too-big-to-fail doctrine, uninsured deposits at large
banks typically have been protected in full--through purchase and assumption resolution methods--while those at smaller institutions generally face a greater risk of some loss.
She is a founding member of LMA's Southwest Chapter and formerly was a Member at Large
for LMA's National Board.
Last year, another surge in loan loss provisions, concentrated at large
banks with substantial loans to developing countries, pulled down the industry's return on assets to 0.