The U.S. banking industry had a banner year in 2012, the FDIC reported today, with the second-highest annual profit figures ever.

Also, the banking industry is becoming more consolidated. So, all around good news for the big banks. How do they do it? One reason is that increased regulation creates a “moat” around the big banks, keeping out competition.

Another reason: the assumption that big banks will be bailed out lowers their borrowing costs.

Scholars at the International Monetary Fund put a number on that too-big-to-fail discount — 0.8% in interest rates. Bloomberg News explains that this difference accounts for basically every penny of profit the big banks make:

Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail….

Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.

The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. – - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits.