I was wondering when someone was going to point out that the small banks (or companies) that did not get bail-outs can not compete against those that obtained government funding.

Ironically, it is the FDIC head that points this out:

Community banks are coming under intense pressure from a crumbling commercial real estate market, a weak economy — and lop-sided competition with banking goliaths deemed too big to fail, FDIC Chairman Sheila Bair said Monday.

…

‘Too big to fail’ has become worse,” Bair told USA TODAY. “It’s become explicit when it was implicit before. It creates competitive disparities between large and small institutions, because everybody knows small institutions can fail. So it’s more expensive for them to raise capital and secure funding.”

When will “too big to fail” end?

Does the fact that FDIC Chairman Sheila Bair says “too big to fail” must end act as a warning to anyone?

Another perspective on the bail-out subject – Will other industries experience the same results?  Will Ford be able to, ultimately, compete against a government backed GM?

Related posts:

1. 7(!) banks closed by the FDIC today.
2. FDIC admits it is in the red until 2012
3. Two more banks shut down by the FDIC – Strategic Capital Bank, Champaign, IL and Citizens National Bank, Macomb, IL
4. Banking Collapse Update: FDIC chimes in
5. FDIC running out of funding? Update on the banking collapse.