President Obama presented the Dodd-Frank financial regulation bill as broadside to the big bailed-out banks. To some extent, the banks took it as such, as they shifted their donations from being heavily Democratic to heavily Republican.

But all along, there were signs that the legislation wouldn't hurt the big banks too much, and that, in fact, it might help them. Back in June, as Wall Street hosted a fundraiser for Barney Frank, I wrote, "Even if banks don't like all his regulations, they might consider them a price worth paying to ensure future bailouts.

A report today from Suzy Khimm at the Washington Post adds further weight to this idea:

Dodd-Frank imposes stricter capital levels for banks with more than $50 billion in assets and gives the government new authority to liquidate troubled, risky firms. But the new rules don’t directly limit the size of big, risky financial institutions. And some critics warn that the benefits will still outweigh the costs, as the market will implicitly consider them “too big to fail.”

“Debt holders of major financial institutions have an expectation that the government will shield them from losses and, as a result, they do not accurately price risk,” Joseph Warburton and Deniz Anginer wrote recently. “This expectation of public support constitutes a subsidy to large financial institutions, lowering their funding cost.”