Posted on 02/25/2014 12:43:29 PM PST by grundle
My colleagues Hester Peirce and Robert Greene have put together a series of charts showing the recent concentration of the U.S. banking system — small banks are disappearing and large banks are growing in number. Here is one of their charts that shows the changes:
Repeated waves of bank regulation — most recently Dodd-Frank — can be particularly burdensome for small banks. Peirce and Green explain:
Regulatory compliance can be a particular challenge for small banks with limited compliance expertise. Regulatory expenses absorb a larger percentage of small banks’ budgets than of their larger counterparts’ budgets. Although correlation is not evidence of causation, as financial regulation has increased since 2000, so has banking concentration. The Dodd-Frank Act, passed in 2010, imposes a new set of regulations that are disproportionately burdensome to small banks. Moreover, by designating the largest financial institutions as “systemically important,” Dodd-Frank creates a market expectation that designated firms are too big to fail and generates funding and other competitive advantages for the largest US banks.
Since the second quarter of 2010—immediately before the July passage of Dodd-Frank—to the third quarter of 2013, the United States lost 650, or 9.5 percent, of its small banks. Small banks’ share of US banking assets and domestic deposits has decreased 18.6 percent and 9.8 percent, respectively, and the five largest US banks appear to have absorbed much of this market share. Mounting regulatory costs threaten to accelerate the shift towards big banks and away from small banks that have long been important members of the financial industry and the local communities they serve.
(Excerpt) Read more at nationalreview.com ...
The Government should “do something’ about this!
Maybe they could engineer another Savings and Loan debacle. Or maybe another Housing Bubble!
The first cost us $500 Billion (back when a billion was worth something) and the the second cost us AT LEAST $1 Trillion.
They are planning to “do something” about this.
They want to turn the Post Office into a “Public Option” bank.
Yep, I loved my small bank. It was around for 50 years, then gone, bought up by Susquehanna. Stinks!
Liberals love regulations that put small businesses out of business. Large corporations are easier to nationalize.
As long as I can remember, big banks have been buying up small banks. Nothing new. Nothing to see here.
Dodd Frank is Cloward Piven in disguise.
This destablizes the national economy. It was the small banks that kept America from going into a deeper funk in 2008-9.
This destablizes the national economy. It was the small banks that kept America from going into a deeper funk in 2008-9.
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