Courtesy of Pam Martens
On Monday, the Federal Reserve (which includes no one elected to office by the American people) thumbed its nose at President Joe Biden, the man who received more than 81 million votes in the 2020 Presidential election, representing a 51.3 percent mandate from the American people who vote.
On Friday, July 9, President Biden released a sweeping Executive Order warning federal agencies against actions that create “excessive market concentration” with specific mention of bank merger activity. One business day later, the Federal Reserve…wait for it…approved another bank merger.
The Federal Reserve’s actions from January 1, 2006 through the latest data available on June 30, 2020, define the Fed as the quintessential “excessive market concentrator.” According to the Fed’s own data, it has approved 3,576 bank mergers, while denying zero merger applications, since January 1, 2006. (See data here and here.)
At the end of 1999, the year that President Bill Clinton’s Wall Street-friendly administration repealed the 66-year old Glass-Steagall Act – ushering in an era where Wall Street’s trading casinos could buy federally-insured banks – the number of federally-insured banks and savings institutions has collapsed from a total of 10,220 to 4,978 as of March 31, 2021 according to data from the Federal Deposit Insurance Corporation. That’s a decline of 51 percent in banking competition.
But the decline in the number of overall banks fails to capture the gargantuan concentration of assets at just four banking behemoths: JPMorgan Chase, Bank of America, Wells Fargo, and Citibank. According to the March 31, 2021 report from the Federal Reserve, just four banks own $9 trillion in assets of the total $22.56 trillion in assets owned by all 4,978 federally-insured banks and savings associations in the country.
To put it more poignantly, those four banks represent just 0.08 percent of all the banks in the country while controlling 40 percent of the assets.
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