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If 'Too Big to Fail' Banks Fail, We'd Be Greece (Correct)

Stocks in this article: BAC C JPM WFC

In 2000, Chase Manhattan Corp. bought JPMorgan, creating JPMorgan Chase. In 2004, Bank of America bought FleetBoston Financial. In 2004, JPMorgan Chase bought Bank One. In 2005 Bank of America bought MBNA.

Then the forced purchases began. In 2006 Wachovia bought Golden West Financial in a $25 billion deal adding many bad mortgage loans to its balance sheet.

In 2007 Bank of America bought LaSalle Bank in a $21 billion deal and Wachovia bought World Savings Bank in a $25 billion deal. These purchases involved portfolios of toxic mortgage loans.

In January 2008, before the banking regulators acknowledged the Great Credit Crunch, Bank of America bought Countrywide in a $4 billion deal.

In March 2008, JPMorgan Chase bought Bear Stearns for $10 a share, or just $1.2 billion, with the Federal Reserve taking on a portfolio of about $30 billion in toxic assets.

In the second half of 2008, the soon-to-be-known as "too big to fail" banks were arm-twisted into additional bailout mergers.

Bank of America purchased Merrill Lynch in a $50 billion deal announced on Sept. 15, 2008.

JPMorgan Chase bought the deposits and branches of Washington Mutual for $1.9 billion, a deal announced on Sept. 25, 2008.

Wells Fargo bought Wachovia in a $15.1 billion deal announced on Oct. 3, 2008.

This table shows the assets among the four "too big to fail" banks at the end of the second quarter of 2008 compared with the end of the same period this year.

At the end of the 2008 second quarter, Bank of America was the biggest bank with $1.787 trillion in assets, which is 13.43% of the $13.3 trillion of all assets in the banking system. At this time Wachovia was the fourth-largest bank, with $781.88 billion in assets, and Washington Mutual was in sixth place with $353.07 billion in assets.

Let's look at the four "too big to fail" banks at the end of the second quarter of 2008 compared with the end of second-quarter 2013 with the Washington Mutual assets added to JPMorgan assets and with the Wachovia assets added to Wells Fargo assets.

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