Bank Management and Financial Services Chapter 3

7710 WordsSep 1, 201331 Pages
Dafna Avraham, Patricia Selvaggi, and James Vickery A Structural View of U.S. Bank Holding Companies 1. Introduction Notably, assets held in nonbanking subsidiaries or directly by the BHC parent account for a progressively larger share of total BHC assets over time (the gray area in Chart 1, panel A). This trend reflects a significant broadening in the types of commercial activities engaged in by BHCs and a shift in revenue generation toward fee income, trading, and other noninterest activities (Stiroh 2004). These trends are attributable in part to important changes in the regulatory environment, as discussed in Section 2. Partly the result of a wave of mergers, the share of BHC assets controlled by the ten largest firms has more…show more content…
FRBNY Economic Policy Review / July 2012 65 Chart 1 Chart 2 Trends in Number and Total Size of U.S. Bank Holding Companies Trillions of U.S. dollars Organizational Complexity and International Reach of Large U.S. Bank Holding Companies Number of subsidiaries 20 Panel A: Growth in Commercial Banking Industry Assets over Time Banks not part of BHC Small BHCs Large BHCs: Outside of commercial bank subsidiaries Large BHCs: Commercial bank subsidiaries 4,000 1990 2012 3,000 15 2,000 10 1,000 0 5 Gramm-Leach-Bliley Act 1 2 3 4 5 6 7 10 20 30 40 50 Rank of BHC Number of countries 0 1991 Percent 95 00 05 10 BHC count 8,000 7,000 6,000 100 80 60 40 5,000 4,000 3,000 2,000 1,000 0 20 0 1 2 3 4 5 6 7 10 20 30 40 50 Rank of BHC 90 80 70 Panel B: Evolution of Size and Number of BHCs over Time Number of BHCs 60 50 40 30 20 10 0 1991 95 Top ten BHCs’ share of total assets Scale Scale Sources: National Information Center; FR Y-10. Note: Data are as of February 20, 2012, and December 31, 1990, and include the top fifty bank holding companies (BHCs) at each of these dates. See the online appendix for more details. 00 05 10 Sources: National Information Center; FR Y-9C; FFIEC 031; FFIEC 041. Notes: The chart presents financial data up to fourth-quarter 2011. A large bank holding company (BHC) is defined as a
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