Unlike other developed countries, the US has a banking system consisting of many thousands of banks. Although in the United States in the twentieth century the total number of banks declined sharply, however, outwardly it looks as if the US has a decentralized banking system.
This visibility is also created because the banking branch network is limited in the US to a narrower framework than in other countries. For a long time, American banks did not have the right to open their branches at all; in the future, this right was granted to them, but with significant restrictions. Thus, banks may have branches only within a given state, and in some States, banks are generally prohibited from opening branches. Although the number of Bank branches has increased dramatically in recent decades, the number of Bank branches throughout the country is only 1.5 times higher than the total number of all banks. However, behind the seeming dispersion of banking in the US lies the dominance of a small group of giant banks.
One of the manifestations of the concentration of banks in the United States – the so-called local concentration, i.e. the concentration of the main mass of banking resources in a few paragraphs, i.e., at the disposal of the banks in 5 States was about 1/2 the resources of all U.S. banks; only in one state new York was centered about 18% of the total resources of the banks.
Local concentration is combined with the concentration of banking resources in a few large banks. For example, in August 1972, 160 major banks, i.e. only 1.2 percent of all banks, held 57 percent of the total assets and liabilities of all commercial banks in the country. At the end of 1971, of the 500 largest commercial banks in the capitalist world, 178 banks were in the United States, with a total Deposit of $ 328 billion., or about 29% of the total deposits of the largest banks.
A clear expression of the concentration of banks in the US is the merger of banks. The number of these mergers greatly increased after the First world war: in 1910-1920 there were 1523 mergers, covering 2968 banks, and in 1921-1931 – 5094 mergers, covering 9538 banks. After the Second world war, the total number of Bank mergers has declined, but the number of mergers of large banks significantly increased the concentration process in the banking industry of the United States.
The peculiarity of the concentration of banks in the United States, unlike, for example, from England, is that it acts primarily in disguised forms. One of the forms of hidden concentration of banks is the use of small resources by large banks through the system of correspondent relations. Large banks in the Central cities of the United States, entering into correspondent relations with many small provincial banks, are actually at their disposal part of their resources. A clear indicator of this is interbank deposits. Thus, through correspondent relations, the largest American banks increase their resources.
A form of hidden concentration of banks is the so-called system of intertwining directorates, consisting of the mutual participation of the Directors of some banks in the management of others. Another form of hidden concentration of banks in the US is a chain link system. In this case, the whole “chain” of banks is United by a temporary agreement on the joint conduct of any major financial transactions or permanent agreements on mutual support and mutual exchange of shares, the implementation of a uniform credit policy, etc.
An important form of hidden concentration of banks in the United States – the system of banking groups. It consists of the merger of many banks under the control of one joint-stock company that acquires their shares and is usually referred to as the “holding company”. An example of such a holding company is Capital One Financial Corporation. More information can be found on their website, which is localized for different languages – getmyoffer.capitalone.com EN Espanol Latino.
In recent years, in the United States, as in other developed countries, there has been an increase in government intervention in the banking sector. However, the Central issue banks of the country (Federal reserve banks) are not (unlike the UK) the property of the state. However, they are managed by the state, they are closely connected with the Ministry of Finance and invest their funds mainly in government securities. The direct state property is the Federal land banks, the commodity credit Corporation, and the Export-import Bank.