Return to text. Although we focus on the very largest organizations, consolidation has occurred across the range of bank sizes. Riegle-Neal also includes a 10 percent national deposit cap and a statewide deposit cap of 30 percent that can be raised or lowered by the individual states. USAA is one example of a bank that relies less on branches.
Only a few, very small, internet-only banks exist. Only Citigroup owned fewer than 1, branches with branches in Anenberg et al only consider branches of insured commercial banks. Because banking organization structures are complex, identifying bank mergers can be complicated.
Tracking institutions over time can be complicated due to changes in organizational structure or name. We designate the largest banking organization to be the predecessor one. For example, the predecessor of Wells Fargo is NorWest, since it was the largest organization, when they merged.
This assumption is more problematic during the financial crisis, when asset values decreased considerably over short periods of time. Nominal growth rates show the same trends, but are significantly larger. The results are not qualitatively different if we use the top 4 institutions in as a starting point.
The number of banks would almost certainly be at its current level, because most mergers occur between small banks. While national concentration has increased dramatically over the past two decades, average local market concentration has remained virtually unchanged. The economics literature has identified switching costs in banking. See Kiser and Hannan and Adams Total branches include commercial banks and thrifts. HHI calculations include thrift deposits weighted at 50 percent.
Adams, Robert, and John Driscoll Disclaimer: FEDS Notes are articles in which Board staff offer their own views and present analysis on a range of topics in economics and finance. Search Submit Search Button.
Toggle Dropdown Menu. Search Search Submit Button Submit. Twitter Share RSS. We would like to thank Rachael Beer and Lucas Nathe for excellent research assistance Return to text 2. Return to text 3. Farm Credit System Institution Any Federally chartered financial institution that is supervised, examined, and regulated by the Farm Credit Administration and operates in accordance with the Farm Credit Act of , as amended, 12 U.
Finance Company Financial intermediary that makes loans to individuals or business. Financial Holding Company A financial entity engaged in a broad range of banking-related activities, created by the Gramm-Leach-Bliley Act of These activities include: insurance underwriting, securities dealing and underwriting, financial and investment advisory services, merchant banking, issuing or selling securitized interests in bank-eligible assets, and generally engaging in any non-banking activity authorized by the Bank Holding Company Act.
The Federal Reserve Board is responsible for supervising the financial condition and activities of financial holding companies. These companies are required to sell any non-financial commercial businesses within ten years. Foreign Bank The term "foreign bank" generally refers to any U.
Foreign Banking Organization FBO Foreign banking organizations can acquire or establish freestanding banks or bank holding companies in the United States. These entities are regulated and supervised as domestic institutions.
Foreign Branch of a U. Bank A branch that resides outside of the United States, but has a parent that is located in the United States. Foreign Entity Other Foreign institutions that engage in banking activities usually in connection with the business of banking in the countries where such foreign institutions are organized or operating.
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Personal Finance. Your Practice. Popular Courses. Personal Finance Banking. What Is a Bank Holding Company?
Key Takeaways A bank holding company is a corporate entity that owns a controlling interest in one or more banks. The one-bank holding company is simply a holding company for one bank but it has a shorter history as a more flexible arrangement for an independent bank.
Holding companies of many kinds exist throughout the economy. Berkshire Hathaway is one. A BHC may engage directly in—or establish or acquire subsidiaries that engage in—nonbanking activities determined by the Federal Reserve Board to be closely related to banking e. A BHC can also make investments in companies not engaged in activities closely related to banking, but these investments cannot exceed 5 percent of the target company's outstanding voting stock.
Filing requirements and procedures for nonbanking proposals, either post notice or prior approval, depending on the nature of the transaction, are outlined in the BHC Act. The act also includes the competitive, financial, and managerial standards for approval. Amendments to the BHC Act in , i. For a BHC to be eligible to declare itself an FHC, all of the BHC's depository institution subsidiaries must be well-capitalized and well-managed and have satisfactory or better ratings under the Community Reinvestment Act.
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