September 7, 2010 – The vast majority of banking industry assets are controlled by a small minority of large banking institutions. As the number of banks has declined sharply over the past twenty years (see US Loses 7,300 Banks), banking assets have been concentrated into the hands of the banking giants.
Banks with more than $10 billion in assets control 78% of total banking industry assets and banks with $1 billion to $10 billion in assets control 10.8% of industry assets. Smaller banking institutions with $1 billion or less in assets represent over 90% of total banks but hold only 11.2% of total assets.
Despite the fact that 7,300 banks have vanished over the past twenty years, total assets of insured institutions have almost tripled since 1995.
A total of 660 banks that have $1 billion or more in assets represent only 8.4% of total banks, yet account for 88.8% of total assets. A small handful of 105 banking giants with assets of over $10 billion represent only 1.3% of total banks yet account for 78% of industry assets.
Small community banks, long an integral part of the US banking system, have been disappearing for decades due to bank mergers and failures. Whether or not the small banks still in business can compete and survive against the mega banks remains an open question.