Wednesday, March 3, 2010

Some Banking Statistics

According to FDIC statistics on depository institutions, there are currently 8,012 commercial banks and thrifts holding a total of $13.1 trillion in assets. Their total capital is $1.467 trillion, so their average capital ratio is 11% and their average leverage is 7.9.

There are 85 commercial banks, approximately 1 percent of the total of all depository institutions, each having more than $10 billion in assets. Their total assets are $9.1 trillion, approximately 72 percent of the total. They have $1.08 trillion in capital. Their average capital ratio is 11.4% and leverage is 7.7.

There are 34 thrift institutions with assets of more than $5 billion. That is a bit less than 1/2 percent of the total number of depository institutions. Their total assets are $749 billion. They have $82 billion in capital. Their average capital ratio is 10.9 percent and their leverage ratio is 8.1.

There are 672 commercial banks and thrifts, approximately 8 percent of the total number , that each have at least $1 billion in assets. Their assets are $11.6 trillion, or about 88 percent of the total. Their capital is $1.34 trillion, for an average capital ratio of 11.6 percent and leverage of 7.6.

That implies that the 7,340 "small" commercial banks and thrifts, each with less than $1 billion of assets, make up 92 percent of the depository institutions and hold approximately 12 percent of the total assets. Their total assets of $1.5 trillion and capital of $125 billion implies a capital ratio of 8 percent and a leverage of nearly 11.

According to the Fed's national information center, the 50 largest bank holding companies have a total of $14.1 trillion in assets. The largest bank holding company is Bank of America, which alone has $2.2 trillion in assets. Number two is JP Morgan Chase, with approximately $2 trillion. Citibank is number 3 with $1.85 trillion. Wells Fargo is now in the big league at number 4, with $1.2 trillion. And finally, newly joining the ranks of bank holding companies, is the formerly stand alone investment banks, Goldman Sachs at number 5 with $850 billion and Morgan Stanley at number 6 with $775 billion.

The top four have a total of $7.4 trillion in assets. Adding in Goldman Sach's and Morgan Stanley increases that to nearly $9 trillion.

Obviously, the FDIC figures on depository institutions and the Fed's figures on bank holding companies don't match up. Presumably, the bank holding companies (say, Metlife which is number 7 on the list,) have assets that FDIC doesn't count.

However, I think the numbers are suggestive of how the failure of a handful of very large institutions would be very disruptive to the credit markets and the payments system. The fact that there are nearly approximately 8,000 depository institutions tells us little.

On the other hand, the failure of 189 banks since 2008, or even reports that 702 additional banks are in danger of failing, doesn't necessarily mean a crisis. It all depends on which banks fail.

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