Here is a tale of two leg-ups: a tale to raise the hackles of the so-called 99 per cent and a tale which plays to the contrast between the US and Australia when it comes to corporate welfare.

Late last week, amid the parliamentary din surrounding the carbon tax, a little bill slipped through the Senate with minimal fuss.

This was the “covered bond” legislation – yet another friendly leg-up to the banks and one which effectively lumps another $130 billion of risk into the lap of taxpayers.

But first, late on Tuesday night this little story flashed up on Bloomberg: “Bank of America hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.

”The Federal Reserve and Federal Deposit Insurance Corp disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorised to speak publicly.”

Translating from “Bloomglish” into English: a cabal of powerful “counterparties” (read banks) had, with the connivance of the US Fed, shifted a load of derivatives (probably the gnarliest credit default swaps on their books) from that part of the bank not backed by taxpayers to that part of the bank which was backed by taxpayers.

While the denizens of Occupy Wall Street mill about outside their windows, the doyens of Wall Street have blithely orchestrated another leg-up from taxpayers, hand-in-glove with their pals on the privately-owned US Fed.

To round out the picture here, the FDIC is the agency which objected to this. It is also the agency which would have to pay out depositors in the event that the Bank of America hit the wall, most likely with a top-up in funding from Washington.

The bank enjoyed a $US45 billion bailout during the financial crisis, after it had swooped to mop up the ailing merchant bank Merrill Lynch. It’s a fair bet that, of its notional $US75 trillion in derivatives, Merrill’s riskiest bets have just been transferred from the Bank of America holding company to the bank.

Is there another TARP in the works?

Meanwhile on these fair shores, the banks now enjoy the fillip from “covered bonds”. Covered bonds will allow the banks to raise capital a bit more cheaply. They are issued to big institutional investors but, unlike other corporate bonds, rank ahead of depositors in the event of trouble. They are safer, therefore carry a lower yield.

Let’s not forget the banks have already been propped by guarantees on their wholesale funding and deposits, not to mention the short-selling ban and asset swap arrangements with the Reserve Bank.

Now, with covered bonds – which had previously not been allowed as they provide senior secured funding for bondholders at the expense of depositors – the taxpayer is on the hook for banks’ deposit liabilities.

Mind you the taxpayer is on the hook anyway as the financial crisis demonstrated banks are a cherished species too big to fail.

Observers estimate their cost of funds should be 30 basis points lower thanks to covered bonds, although few expect this little earner to be passed on to customers.

Covered bonds shift risk away from the wholesale bond investors to the taxpayers – and we are talking about $130 billion worth of risk, possibly increasing as time passes. There is no quid pro quo. At least with the sovereign guarantee for wholesale funding the banks were required to pay a fee.

This leg-up is perhaps best-described as a backdoor sovereign guarantee.

Bank shareholders can take comfort from the fact that their government lobbyists, as usual, have been working overtime to have their way with Canberra.

Their case relied on the argument that, one, cheaper funding could be passed on to borrowers and two, foreign banks are allowed to do it.

And they surely are, but the foreign banks don’t really compete head-to-head with the locals in their $A lending markets.

As far as leg-ups go though you would have to say that America is in another league entirely than Australia when it comes to bailouts, banksters’ rorts and general economic turmoil.