In this sense, lower bank proﬁtability may be in line with a more robust banking system and with lower costs for the taxpayer. Before the 2008 ﬁnancial crisis, banks that were considered to be too-big-to-fail in effect enjoyed an implicit subsidy from the state.
This is a costly economic distortion, and the reforms https://www.bundesbank.de/en/press/speeches/implications-of-the-too-big-to-fail-reforms-for-global-banking-836618  2/10  8/4/2020  Implications of the too-big-to-fail reforms for global banking | Deutsche Bundesbank  aim to reduce this subsidy. If the reforms are having an impact, we would expect to see the proﬁtability of G-SIBs fall relative to other banks, all other things equal.