Banking in the United States sets the pace for global finance. The dollar accounts for 42% of payments, 50% of loans and 90% of all currency operations. And as if that were not enough, since March 2022, central banks around the world have been waiting for the Federal Reserve (Fed) decisions on interest rate increases to adopt their own measures.
The dominance of the dollar is inevitably transferred to the US banks, which in 2022 occupied twelve of the hundred sites on the list of major entities in the world and contributed 15% of its assets, According to data from the consulting firm S&P Global. Only Chinese banks, most of which are state-owned, have a bigger role.
Altogether, the US Federal Reserve, its central bank, calculated As many as 2,124 banking brands with assets of $300 million or more operated in its territory at the end of last year. Together, they totaled nearly $22 trillion, a figure similar to the country’s GDP. However, over the past decades, major US banks have been merging, consolidating, and expanding, that is, concentrating, and only among the four major banks—JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo—add 42% to all of this legacy.
If we include all US banks regardless of their economic strength or regional coverage, then in 1985 there were 14,427 FDIC-insured entities, while in 2022 there were only 4,706.
The largest banks in the world
The exclusive list of the 15 largest banks in America changes often, with the advent of fast-growing new entrants — such as Capital One, founded in 1994 — or new business ventures — the merger of BB&T and SunTrust Banks in 2019 triggering the resulting Truist Financial. to higher positions―, although it is true that the Big Four have placed Earth in the middle with respect to the rest of the entities. Wells Fargo, the nation’s fourth-largest bank, is close to quadrupling the asset value of its closest competitor, US Bank,.
So far, the crisis has been unleashed by the bankruptcies of Silicon Valley Bank and Signature Bank, whose fall led to the second largest drop in banking assets in the history of the North American state – surpassed only by 2008, when there were 25 bankruptcies. None of the fifteen most important branches in the United States were infected. Both entities ranked as the 16th and 29th largest US assets, respectively.
Major bank failures in the United States
A financial storm was about to take over First Republic, the fourth largest bank in the country, but as many as 11 large entities came to their aid and saved the San Francisco-based company. Specifically, JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo have each committed to contribute $5,000 million per deposit, an amount that will be supplemented by contributions from Morgan Stanley, Goldman Sachs, PNC Financial Services, and Bank of New York Mellon, Truist Financial, State Street, and US Bancorp to reach $30 billion.