Bank Consolidation

[Pete]

Great chart that shows how 37 big national banks became only 4 starting in about 1995. Of course, doesn't even touch on the hundreds if not thousands of regional banks that were swallowed up as well.

[David]

It's interesting seeing how the names merge (or don't, Wells Fargo is a name with some lasting power).

But that said, that's a chart I'm a little instinctively untrusting of on account of how it sums up complicated details into just a few lines. Anytime you do that you can emphasis the data that helps your point while ignoring the data that doesn't. For example, it's easy to say that they're all big national banks and I definitely recognize many of the names, but there are also many I don't. Baybanks? It also implies that everything merges together and that pieces never gets sold off. The first name I queried, Baybank since I singled it out above, apparently had South American holdings as well as domestic (mostly in the New England area), and those have been sold off to large banks in the

Not that I necessarily disagree with the conclusion being drawn, but I would want to see some numbers backing the statement that that chart is making. Size of the monetary holdings, number of accounts, regional coverage, etc., and it would also be nice to see those same numbers for the banking system as a whole.

Edit: scratch that a little, it was BankBoston that Baybanks merged into that had the South American holdings, but that doesn't really change my point.

[zookeeper]

Bottom line is that consolidation created these banks that were "too big to fail" during the financial crisis.
Today? They're even bigger.

[FighttheGoodFight]

Bottom line is that consolidation created these banks that were "too big to fail" during the financial crisis.
Today? They're even bigger.

Well gotta get bigger so you can get bailed out again!

[AP]

The good news is there are still over 6,000 FDIC insured banks in the US and over 9,000 Credit Unions.

[David]

Best source for that chart I could find is: How Banks Got Too Big to Fail | Mother Jones

Which honestly doesn't include much more supporting data, but at least includes the following:

The nation's 10 largest financial institutions hold 54 percent of our total financial assets; in 1990, they held 20 percent. In the meantime, the number of banks has dropped from more than 12,500 to about 8,000.

But since it dates to 2010 it would also be nice to see how things have changed in the 6 years since.

Also, you aren't going to get me to be too upset about the bailouts considering how much of that money has been paid back: Bailout Scorecard | Eye on the Bailout | ProPublica

[zookeeper]

Best source for that chart I could find is: How Banks Got Too Big to Fail | Mother Jones

Which honestly doesn't include much more supporting data, but at least includes the following:



But since it dates to 2010 it would also be nice to see how things have changed in the 6 years since.

Also, you aren't going to get me to be too upset about the bailouts considering how much of that money has been paid back: Bailout Scorecard | Eye on the Bailout | ProPublica

Well, reminding people they "paid it back" does not lessen the fact that they wouldn't be here if it hadn't been for the bailout. They are now in a position to do it all again. "After all, we paid it back."

Community banks are being eaten alive by these TBTF banks, thanks to the "intervention." Nobody rushes in to help community banks, they fail and are bought up by another - usually larger - bank.

[David]

It's not like the TBTF banks were the only ones that received bailout money. For example, here is the list of Oklahoma institutions: https://projects.propublica.org/bailout/list/state/OK. Hell, MidFirst is on that list.

We would have been hurting bad if all of those banks were allowed to topple like we lost banks in the 80s. Honestly, that was one of the really interesting observations that occurred to me when I watched Mick's documentary last year, it felt like I was watching a preview of the more recent crisis writ small and handled 10x worse.

[AP]

I used to work for Southwest Bankcorp (Stillwater National Bank, now BankSNB) and still work with them in the FinTech industry. I had no clue they received bailout money.

[Zuplar]

As a Banker myself it is always interesting to see this stuff. Something I studied about in grad school. I'm proud to work for a bank that did not take any TARP. But as far as consolidation is concerned the family that owns the bank I work for recently consolidated all three of their owned banks into one (the one I work for). Their reasons like so many others was to stay relevant and competitive. Although much of our administration was ran through the bank I work at (de facto headquarters prior to merger), there was still duplication in several areas. That being said we didn't let anyone go, we moved around resources and found a job for everyone. Something I'm very proud of especially since I was one of 3 people tasked with heading up this merger.

[Zuplar]

I used to work for Southwest Bankcorp (Stillwater National Bank, now BankSNB) and still work with them in the FinTech industry. I had no clue they received bailout money.

Funny you mention this, but Stillwater National was actually in a lot of trouble there for awhile. So much so that in one of the banking classes I attended ran by the OBA we did computer simulations on how to save that particular bank.

[AP]

As a Banker myself it is always interesting to see this stuff. Something I studied about in grad school. I'm proud to work for a bank that did not take any TARP. But as far as consolidation is concerned the family that owns the bank I work for recently consolidated all three of their owned banks into one (the one I work for). Their reasons like so many others was to stay relevant and competitive. Although much of our administration was ran through the bank I work at (de facto headquarters prior to merger), there was still duplication in several areas. That being said we didn't let anyone go, we moved around resources and found a job for everyone. Something I'm very proud of especially since I was one of 3 people tasked with heading up this merger.

What bank do you work for, if you don't mind me asking?

[Urbanized]

Great chart that shows how 37 big national banks became only 4 starting in about 1995. Of course, doesn't even touch on the hundreds if not thousands of regional banks that were swallowed up as well.

What specifically drove all of the consolidations in 1998?

[rlewis]

The reason for the acceleration of consolidation around 1998-99 was the impending and eventual repeal of the Glass Steagall Act, which lifted a lot of banking restrictions put in place after the Wall Street Crash of 1929. That repeal had a lot to do with the recent crash.

[Urbanized]

The reason for the acceleration of consolidation around 1998-99 was the impending and eventual repeal of the Glass Steagall Act, which lifted a lot of banking restrictions put in place after the Wall Street Crash of 1929. That repeal had a lot to do with the recent crash.

Interesting. I figured it had something to do with a change in government regulation; just wasn't sure what specifically changed then.