Look at the banks' balance sheets

A typical TBTF bank has liabilities of more than 90% of their assets.  For healthy companies outside the banking world that number is more like 70%.  Why is that?  Is it because we, you and I, will bail out the banks if and when they fail?  There has been a fair amount of talk about Basel III, but it would allow banks to borrow up to 97% of their assets.  Regulators here have mentioned tightening up Basel III, however these regulatory changes would still grant borrowing privileges up to 95%.

As Anat Admati writes:

We will never have a safe and healthy global financial system until banks are forced to rely much more on money from their owners and shareholders to finance their loans and investments. Forget all the jargon, and just focus on this simple rule.