July 31 (Bloomberg) — The largest U.S. banks enjoyed lower funding costs than smaller rivals during the 2008 economic crisis although that advantage has declined or reversed in recent years, according to testimony from a government watchdog.

A study by the Government Accountability Office, to be released in full later today, comes after two years of congressional and industry debate over whether large banks continue to get what has come to be known as a too-big-to-fail subsidy despite regulatory changes. Senators Sherrod Brown, a Democrat from Ohio, and David Vitter, a Louisiana Republican, requested the report in January 2013 and have scheduled a Senate Banking subcommittee hearing on it today.

The GAO study found that the largest banks receive more of a market advantage during financial turmoil than during economic boom times. However, the watchdog found that such advantages declined or reversed in 2013, according to testimony from Lawrance Evans, director of financial markets and community investment for the GAO.

"In times of crisis, the advantage is even bigger to the big banks, and that's particularly alarming," Brown said in a Bloomberg TV interview.

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