Market share among U.S. banks

Top 3 Banks = 44%
Top 20 Banks = 92%
All Banks = 100%

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Source:
The Wild West of Finance
ADAM DAVIDSON
NYT, December 7, 2011
http://www.nytimes.com/2011/12/11/magazine/adam-davidson-wild-west-of-finance.html

Category: Legal, Really, really bad calls, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

13 Responses to “The Banking Oligopoly”

  1. carleric says:

    This seems to only emphasize the need to begin asset divestitues of the the top three banks starting today. Do we need a Sherman Anti-trust act for these behemoths? Goodness knows they can’t be trusted to act in any responsbile manner

  2. Blissex says:

    All this enabled by the “national champion” myth, under which it is is all right for USA too big to fail banks to screw americans if they screw foreigners too. The old GM logic, and one which is applied to big oil, big pharma, and Microsoft too.

  3. pcurve says:

    The same landscape applies to many other industries too. So what makes banking oligopoly more problematic?

  4. Sechel says:

    U.S. has traditionally like dealing with dictators. It has the benefit of knowing there’s one guy to talk to who can get the job done. U.S. government may prefer dealing with 3 or 4 heads of big banks as opposed to many smaller ones for much the same reason. At least that’s a thought on the matter.

  5. Lyle says:

    I read the source article, and it did not define what market share is, is it assets, depositors, capital or what? I suspect if one looked at depositors the results would be different, if one includes credit unions. Assets I can believe, because only the big boys can make the big loans, and can finance things other than thru deposits. (Citi for example is more reliant on other sources of funding than deposits, with 1.9 T in assets but only 845 B of deposits world wide, 350 of which are in the consumer segment. The annual report did no break the deposits down by geography, but a significant part are outside the US. So if one does the analysis on the holding company it is not an accurate reflection of the bank part. The data come from the Fed, so I suspect it is at the holding company level)

  6. formerlawyer says:

    Any facts to back that up pcurve?

  7. DeDude says:

    I presume that part of the reason the top 3 are so big is that they are investment banks and both their stock/investment activities and real banking activities are being counted. I think that the first thing to demand is that real deposit FDIC ensured activities get separated with a firewall from investment banking activities.

  8. Winston Munn says:

    All right, I admit this is a wild guess, but I’m betting Bailey Building and Loan is not part of the 92%? Hee-haw.

  9. anewc2 says:

    I thought the Times was supposed to have good graphics people. How could they send a monstrosity like this out over the net?

    The red area on the graph takes up about 20% of the whole circle, not 44%. This is really an elementary mistake.

  10. Futuredome says:

    I would love somebody to run on breaking up the trusts. It would be wild.

  11. gordo365 says:

    Remember – banks r people too…
    Would be great to see a cartoon that represents banks as giants who’s political clout (read level of corruption) is represented by height standing next to lilliputian regular people…

  12. Bruman says:

    As anewc2 said, this chart dramatically understates the problem. They’ve made the diameter of the inner circle 44% of the total. The eye reads these charts by the area of color, not by the diameter of the circle. To communicate the figure correctly, they need to make it so that the AREA of the inner circle is 44% of the total.

    I’ve redone the chart using this principle, and I think most readers will find the difference striking:

    Here’s the URL. (Yes, many will find reasons to snicker a bit… happy holidays!)

    http://www.chadwickresearch.com/Assets/misc/BankMarketShareChart-2011.12.26.jpg

  13. victor says:

    What continues to amaze me is how just about everybody seems to consider financial services as being just another segment of our service oriented economy no different than other productive service endeavors say bulk shipping or software creation. In fact, a goodly portion of the financial services (would anyone on this blog venture assign a %) is so parasitic in nature as to negatively contribute to the GDP,” value extraction not creation” to paraphrase Vanguard’s John Bogle, a great man universally hated on WS for obvious reasons.