Big Banks Dominate U.S. Banking System: Study

Just 16 banks account for more than half of the assets in the nation's banking system, new data show.

The banks -- all of which have more than $100 billion in assets -- control nearly 56 percent of all assets in the banking system, according to an analysis of fourth quarter Federal Deposit Insurance Corp. data by Dennis Santiago, CEO and managing director of Institutional Risk Analytics, a California-based consultancy.

The concentration of power among the nation's megabanks is more than double what it was just nine years ago, and has more than tripled since 1995.

The consolidation among banks and the growth of the big ones is of particular concern to policymakers and economists who are pushing to fundamentally reform the nation's broken financial system. Leading voices like Federal Reserve Bank of Kansas City President Thomas M. Hoenig and U.S. Senator Ted Kaufman (D-Del.) want to bust up the megabanks, arguing that the firms played a big role in causing a near-meltdown of the financial system and the subsequent Great Recession. The firms benefit from their size by being implicitly -- if not explicitly -- backed by the U.S. government, giving them a huge advantage over traditional Main Street banks, which harbor no illusions about U.S. taxpayers possibly bailing them out.

The prospect of potential bailouts has allowed these firms to enjoy lower borrowing costs, allowing them to grab more market share and get bigger. In 2008, the firms were all bailed out by taxpayers. Meanwhile, small banks are failing at the fastest rate since the early 1990s.

In 1999, there were eight banks with more than $100 billion in assets, Santiago's analysis shows. They had a combined $2.5 trillion in assets. As of Dec. 31, 2009, there were 16 banks with more than $100 billion in assets. Together, they have about $8 trillion in assets.

(Check out the chart below - or for a bigger version click here.)

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Comments

[Carolab]

02:22 AM on 04/06/2010

All due respect but did we need a study to tell us this?

I thought it was self-evident.

And clearly they are trying to cement their monopoly by rigging stress tests, and making severe capital restrictions on TARP money for smaller banks in order to cripple them so they can close them and/or buy them up.

[anticapitalist1983]

08:07 PM on 04/05/2010

BREAK UP THE BIG BANKS.

SEIZE ALL FORECLOSED HOMES AND GIVE THEM TO PEOPLE WHO NEED HELP TO START MAKING THEIR AMERICAN DREAM A REALITY.

empty building and high rents / homeless people is a slap in face to our humanity and dignity!!!

[PhilipTaylor]

08:41 PM on 04/05/2010

Jam!e D!mon and the GANG of TH1EVES Ge1thner and Ber_nanke

http://www.muckety.com/63E6710CF76DFD4C9DA325BF8F1991E1.map

[commonsense68130]

12:06 AM on 04/06/2010

Heck... why stop there? All property should be seized and distributed evenly among the people.

[anticapitalist1983]

01:50 AM on 04/06/2010

let's start with the banks and other property "owned" by non-human enities such as corporations and go from there, eh?

[hollybork]

01:18 PM on 04/15/2010

No, let's not do that. It didn't work in Russia, as I recall from watching Doctor Zhivago.
I think we can pass on communism and go straight to a constitutional form of private ownership that has anti usury, anti monopoly, and a glass steigel separation of banking and roulette. That does not legitimize fraud and deception in the marketplace, nor encourage conglomerates to fix prices and eliminate competition, not put a Commandant in charge of the proletariat.

[PhilipTaylor]

06:50 PM on 04/05/2010

Jefferson County, Alabama is the V1CT1M of Rank FEE and BRIBING Criminality of Wall Street!

SWAPS + FEES + PAYOFFS + BRIBES + FELONIES + SCAMS + L1ES + EXPL0ITATION

YET NOT ONE WALL STREET CEO HAS EVER BEEN PROSECUTED AND SERVED TIME! EVER IN HISTORY! MONEY TALKS AND CRIMES WALK!

[PhilipTaylor]

06:58 PM on 04/05/2010

JPM BANKSTER on tape said, it is "the price of doing business" with Wall Street.

Really no room left for illusions- we live in a gangster NATION - No different from 3rd World!

20 Birmingham Mayor, Officials, and businessmen were Convicted and are in jail for the crimes!

BUT JPM CEO and OTHERS ARE STILL RUNNING FREE! HOW YOU ASK? MONEY AND POWER CAN MAKE CRIME TAKE A WALK OFF A UNFINISHED BRIDGE!

JAMIE D1MON FREE!

[PhilipTaylor]

07:20 PM on 04/05/2010

BRIBES = Rolex watches +Ferragamo suits+Cash

Original cost of new sewer system = $250 million
JPM and Local CR00KS pumped the sewer Cost to $3BILLION!

JPM took Jefferson County for ONE HECK of a RIDE on JPM SCAM Train to $64/month Charges!

By 2003, annual interest on the sewer reached $90Million so Wall Street did MORE SCAMS to HELP (LOL!)

1. Converting County from a fixed rate to an adjustable rate to lower payments of a couple years.
2. Wall Street said for an extra FEE we'll allow you to keep a fixed rate on your debt + a variable kickback to pay off the variable-rate interest to Bondholders = A synthetic rate swap SCAM!

Jefferson had a FING CR00KED M0R0N Bribe taker named Blount and JPM had and equally CR00KED Briber named LeCroy to pull off the SCAM!

"Banks would pay some local consultant, and the consultant would then funnel money to the politician making the decision," says Christopher Taylor who pushed through a ban on such backdoor bribery. But the s1eazeba11 Blount argued that halting legalized graft vio1ated his First Amendment rights.

[PhilipTaylor]

06:38 PM on 04/05/2010

MORE CRIMES OF WALL STREET: JPM+G0LDMAN!

Third World = Jefferson County, Alabama $5Billion in DEBT! 1,000 Public employees forced unpaid leaves+courthouses, jails, and sheriff's precincts closed so WallStreet banksters get paid.

Homes are empty, businesses boarded up, and parts of already-blighted Birmingham look like a ghost town.

$64 Sewer Bill/MONTH up 400% in a few years - 1996 it was $14.71. County was SCAMMED by BearStearns, Lehman, Goldman and JPM just LIKE GREECE was to build a sewer system.

Oligarchical capitalism: Mob of corrupt local officials and morally CRIMINAL Financiers converted human waste into $Billions in Wall Street L00TING +misery for people!

Toilet finance charges using Same Swaps SCAMS as Sub-Prime Housing to rake off $Millions in FEES to JPM and G0LDMAN! As before JPM criminally bribed middlemen+county commissioners.

FBI CAUGHT JPM "RED-HANDED" USING DERIVATIVES TO STEAL FROM SCHOOLS &CITIES:

Link: http://www.bloomberg.com/apps/news?pid=20601014&sid=aIL9gsK5wG40

Example 1: JPM made more FEES than CASH paid to Erie, Pennsylvania School District
School = $755,000
JPM = 1.2 million in FEES.

Example 2: JPM made over $4 Million on Philadelphia International Airport $6.5 Million Derivative Deal

SEC testimony: “They’re about getting fees, the most fees they can get.” that is 10 X Cost of a bond issue. JPM bankers were caught giving $280,000 to Airport Executive’s school district for signing Contract.

http://www.rollingstone.com/politics/story/32906678/looting_main_street/1

[Thanks to Stevoh]

[PhilipTaylor]

06:40 PM on 04/05/2010

HECK the MONEY was so good, JPM paid G0LDMAN $3 million to back OFF, so they could have the rubes of Jefferson County to fleece all for themselves.

[PhilipTaylor]

06:45 PM on 04/05/2010

Birmingham = Poster Child for Wall Street giant Financial Fraud threaten US cities and counties!

CITIES AND COUNTIES MUST JOIN TOGETHER AND REFUSE TO PAY WALL STREET!

[luling]

06:32 PM on 04/05/2010

alligators?

[Mike Garibaldi-Frick]

06:25 PM on 04/05/2010

It is time to transfer your accounts to a credit union.

[WIpatriot]

12:48 AM on 04/06/2010

Been with the same one over 30 years. Knew the last CU president personally...he had a strong fade off the tee.

[DLee4144]

06:22 PM on 04/05/2010

It isn't necessary to wait for the government to do something about this. All we need to do is:
Tomorrow: switch your checking and savings accounts to a small locally owned bank.
As soon as possible: switch your home loan and any other loans you can to a small locally owned
bank
When you get a new car: Use the same bank.
But, do your homework. PoDunk bank may be owned by one of the Megabanks and just operating under it's original name.
Wall Street bankers don't create a dime's worth of value- they are totally worthless creatures- all of the actual value in this country originates from the people who are doing actual work- producing something on Main Street. We just need to keep it there.

[debtanchor]

06:14 PM on 04/05/2010

In the 1970's Finance Companies lent money...lots of money and kept their delinquency rate down to 2-3% year after year. Why? Finance companies did not have access to Fed money, ie., 9-12X what was on deposit. This limited speculation and kept borrowing within a borrows range. Everybody, in a finance company, knew everyone elses job. If your delinquency rate fell below "your break figure" (profit margins) you merely lost your job.

Hvae times changed? Not much the above system still works well in almost every catagory where money is involved. As long as banks don't change their practices we will always have these meltdowns.

[stevonh]

06:07 PM on 04/05/2010

a good article on how the banks are shafting us
http://www.rollingstone.com/politics/story/32906678/looting_main_street/

[PhilipTaylor]

06:10 PM on 04/05/2010

Thanks Stevonh!

[jamaicalover]

06:17 PM on 04/05/2010

Where is the Tea Party when you need them?

[Faraja]

05:50 PM on 04/05/2010

Keep in mind 56% is not that much compared to other countries. The average for other countries is 69%. What about Canada with their Big Five banks? Big is not bad! Big is better!

[PhilipTaylor]

05:58 PM on 04/05/2010

We are NOT other Countries and we need a MAIN STREET BANKING SYSTEM!

[Faraja]

06:26 PM on 04/05/2010

Main Street vs Wall Street game is not going to get you anywhere. If you don't like big banks then move to community banks or credit union. This is free-market and you are part of it. Enjoy the ride.

[Factonfact]

05:05 PM on 04/05/2010

It's not so much big banks that are a problem as it is big UNREGULATED banks.

[PhilipTaylor]

05:13 PM on 04/05/2010

It is the CR1M1NAL ELEMENT that run the Wall Street Banks!

JPM CAUGHT "RED-HANDED" BY FBI USING DERIVATIVES TO STEAL FROM SCHOOLS &CITIES:

Link: http://www.bloomberg.com/apps/news?pid=20601014&sid=aIL9gsK5wG40

Example 1: JPM made more FEES than it CASH paid to Erie, Pennsylvania School District School Got = $755,000& JPM collected $1.2 million in fees.

Example 2: JPM made over $4 Million on Philadelphia International Airport $6.5 Million Derivative Deal

SEC testimony: “They’re about getting fees, the most fees they can get.” that is 10 X Cost of a bond issue. JPM bankers were caught giving $280,000 to Airport Executive’s school district for signing Contract.

[schatsie]

11:10 PM on 04/05/2010

Heck, good old Warren B got a BILLION DOLLARS in walk away money from Constellation Energy....and we are all paying that in our rates in post tax dollars and the SOB probably is either deferring the taxes or paying 15%....NOT LIKE US SCHMUCKS paying payroll and income taxes.....GOD FORBID THE RICH SHOULD PAY TAXES....

[commonsense68130]

05:05 PM on 04/05/2010

Of course they do... we didn't allow them to collapse when they deserved to.

The current economic environment will only exasperate this issue. We are going to see the commercial bubble pop and small banks are going to fall like dominoes.

[PhilipTaylor]

05:06 PM on 04/05/2010

Very sad! Concentrate the POWER all in the R0THSCHILD EMP1RE!

[stevonh]

06:24 PM on 04/05/2010

I think we expected them to act decently when "we" bailed them out with our hard earned money.
No such luck.

[hollybork]

01:23 PM on 04/15/2010

In business, you do not "expect" things unless you get it in writing. You don't bail someone out unless you get something back that benefits you. That is the whole problem with having that weasel Geithner who failed at everything he every did, negotiate something using US tax dollars, with Ben Bernanke and the Goldman Sach's people looking over his shoulder. Geithner then let at least some of the players cover up their trail to shareholders.

Tim Geithner should be in prison for criminal negligence, but what does the Administration do? Put him in charge of the US Treasury! Every time I see his weasely face on TV and listen to his whining and vacant explanations, I get sick.

[PhilipTaylor]

04:59 PM on 04/05/2010

Same INEQUALITY OF INCOME FOR BANKS AS FOR PEOPLE!

INCOME INEQUALITY IS WORSE THAN before THE GREAT DEPRESSION!

[PhilipTaylor]

04:59 PM on 04/05/2010

The Bush presidency showed a sharply growing income inequality that marked the 1970s and 1980s. Republicans emphatically supported both macroeconomic performance and the tax policy of the Bush administration in first two years in office increasing income inequality dramatically.

Democratic patterns show a steady state on income equality as shown in the last five years of the Clinton administration.

Democrats = Status quo on inequality!
Republicans = A dramatic and significant further increase in economic inequality!

Continuous Democratic control over last three decades would have produced a decrease in inequality despite technological, demographic, and global competitive forces.

Continuous Republican control would have produced a much sharper polarization between rich and poor than we have actually observed over the past thirty years. A scary proposition!

http://www.russellsage.org/programs/publications/workingpapers/politicsincdist/document

[commonsense68130]

05:06 PM on 04/05/2010

Wanna place a wager on how income inequity will look in 3 years?

[hollybork]

01:29 PM on 04/15/2010

You are exactly right. I like your politics and your economics.

Also, Andrew Jackson was a heck of a populist.

Where is our populist presidency now, Phillip? Would the Tea Party have been born had Barack Obama appointed Elizabeth Warren at Treasury, Paul Volker as Fed Chairman, and Jamie Gailbraith as Economic Adviser? Would Mainstreet feel so benighted if the guys who came up under Rubin, the same old foxes who led us into this rugged mess, were not given guard over the hen house? I cannot think of a reason why the Administration did that except lack of attention, or pandered to the rich guys. What do you think?

[hypnotoad72]

04:29 PM on 04/05/2010

As do big corporations.

Now ask where do "small banks" and "small businesses" belong?

[FoonTheElder]

04:26 PM on 04/05/2010

"Just 16 banks account for more than half of the assets in the nation's banking system, new data show"

That would make banking one of our most competitive industries. Most other industries have far fewer big corporations controlling their industry. Of course, what is not mentioned is that how many banks actually control regions of the U.S. Chances are that one or two large banks control many regions of the U.S.

http://www.oligopolywatch.com/stories/2004/07/03/banking.html