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$26 Trillion Financial-Sector Assets Now Covered by Taxpayer, Could be Bailed Out

June 17, 2015 (EIRNS)—The "Bailout Barometer" report maintained by the Richmond Federal Reserve has reached a new high in taxpayer-guaranteed debt assets of the financial sector, just as the trans-Atlantic bond markets show signs of cracking.

"At Stake in a Financial Meltdown: $26 trillion" was the headline on CNBC’s report of the latest "Barometer." This is "the amount to which taxpayers, in an extreme case, would be exposed should things go haywire again," and is now 60% of the entire financial sector on the liabilities side.

As CNBC admits, this is "a post-crisis high for a system that regulators and legislators have sought desperately to downsize. To no avail; the total was $24.92 trillion in 2009, a trillion higher now.

Just under $17 trillion of the instruments to be bailed out are those of big banks and money-market mutual funds; the rest are dominated by assets of Fannie, Freddie, and other GSEs.

The 2008 collapse saw $4.76 trillion in government funds actually doled out to financial institutions, about one-fifth of what was potentially "covered." That already exceeded the size of the annual Federal budget, and still does.