More on Big Bank Endgames

Now what could force their hand is a run on either bank, either depositors (replay of WaMu, on a bigger scale) or counterparties refusing to extend credit or moving accounts out (the Bear scenario). The possible perps of a deposit run would be those whose balances exceed FDIC guarantees (most likely businesses, since if you have payroll of any size, it is impractical operationally to divide your payroll processing among a lot of banks, and you need to have enough cash in the till to make the payments) and foreign depositors. As Felix Salmon noted earlier, Citi has a LOT of foreign deposits. as in....over half a trillion (this relative to a balance sheet of $1,9 trillion).

I haven't (yet) seen any indication of counterparties headed for the exits. Again, with the government apparently at ready to throw cash at institutions deemed systemically important, there is far less cause for anxiety. Everyone seems to have gotten the memo that there won't be a second Lehman.