WASHINGTON — Despite efforts to reform the global banking system, the perception that the world's largest financial institutions are "too big to fail" has yet to be eliminated, according to a report issued Monday by the International Monetary Fund.

As part of a broader report, the IMF compared the funding advantages across countries showing that subsidies received by "too big to fail" firms had declined since the peak of the financial crisis, but were still higher than before the downturn.

"Given the progress of financial reform since 2010 (for example, Basel III reforms, the Dodd-Frank Act in the United States, and recent agreements on bank resolution in Europe,) implicit too important to fail subsidies have declined," according to the report.

That was especially true of U.S. financial institutions, which received the lowest implicit taxpayer subsidy in a range of $20 billion to $70 billion among all the countries examined. The decline was attributed to the regulatory reform effort and better supervision.

Banks elsewhere saw larger estimated subsidies, leading with institutions in the Euro zone, which the IMF found benefited from an implicit taxpayer subsidy in a range of $90 billion to $300 billion in 2011-2012.

Subsidies in the United Kingdom and Japan were both as high as $110 billion in that same period.

The study did not examine systemically important nonbank financial institutions, such as insurance corporations or central counterparty clearing houses, due to limited data availability.

According to the Washington-based global lender, there are already signs that the regulatory reform effort is having an impact on limiting the size of the implicit subsidy, but there is still more work to be done.

Data shows that new bank requirements such as the Volcker Rule, a provision in the Dodd-Frank Act that bans banks from gambling with taxpayer dollars, significantly increased credit default swaps, suggesting "that the perception of government support declined."

"At the same time, equity returns fell, implying the announcement was seen as negative for systemically important banks' profitability," according to the report.

New leverage ratio requirements also significantly reduced CDS spreads, since they were expected to lower global systemically important banks' probability of distress. In the U.K., the release of the Vickers proposal also had a significant positive effect on CDS spreads, as did the European Commission's proposal for a deposit guarantee and recovery and resolution directive.

Even so, the IMF called on regulators to continue to take steps to further strengthen the regulatory system in order to eradicate the funding advantage associated with "too big to fail" institutions.

"Strengthening the resilience of SIBs remains a key strategy to enhance financial stability, and it has been central to international policy initiatives to tackle to the TITF problem," according to the report.

For example, the IMF called for additional capital buffers, loss provisioning, or bank levies as options to lower the risks of a "too big to fail" institution from becoming distressed and putting taxpayers on the hook.

The fund used three ways to calculate the funding advantage of the biggest banks: bond yields, contingent claims analysis, and a ratings-based approach.

The report comes on the heels of a study by economists at the Federal Reserve Bank of New York, which showed that the top five U.S. financial institutions benefited from a funding advantage in key markets prior to the enactment of the regulatory reform law in 2010.

Banks like the JPMorgan Chase, Citigroup and Bank of America gained an additional discount from bond investors by about 31 basis points compared to smaller institutions, according to the New York Fed study.

The industry has also published its own studies on the issue. The Clearing House, an industry group for the biggest banks, published its own report in March that found that the funding costs between large and small firms were insignificant.

The Government Accountability Office is expected to release a second report on the subject this spring.

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