Main article: US economy
Number of banks in the United States
At the end of 1986 USA , there were 18 thousand banks, after 10 years the number was reduced to 12 thousand, at the beginning of the zero banks there were 10 thousand, before the financial crisis in 2008 - already 8.5 thousand, before - COVID-19 5200, and as of March 2023 there were less than 4700.
Recently, an average of 200 banks per year have been bankrupt (usually with assets less than 1-3 billion).
In 2023, small banks with assets of less than 1 billion form 4.8% of the assets of all banks, before COVID-19 - 6.2%, before the 2008 crisis - 11.4%, in the early 2000s - 18.2%, in the mid-1990s occupied 25%.
The US banking system is being cleaned up and liquidity is being concentrated in large banks.
Largest banks
2022: Largest by asset
If we combine global assets taking into account the investment bank division, then by assets the largest American financial structures:
- JPMorgan Chase & Co - 3.66 trillion,
- Bank of America Corporation – 3.05 трлн,
- Citigroup - 2.11 trillion,
- Wells Fargo & Company - 1.88 trillion,
- Goldman Sachs - 1.44 trillion,
- Morgan Stanley - 1.18 trillion,
- U.S. Bancorp - 0.67 trillion
If you isolate the investment banking units by allocating only the assets of banks within the dollar system, the following is obtained:
- Capital One Financial Corporation – 452 млрд,
- Goldman Sachs - 439 billion,
- The Bank of New York Mellon - 236 billion,
- Morgan Stanley - 209 billion,
- State Street Corporation - 209 billion,
US divisions in the United States of international banks:
- HSBC Bank USA - 231 billion,
- UBS - 201 billion,
- Barclays - 179 billion,
- Santander Bank - 166 billion,
- BNP Paribas - 143 billion,
- Deutsche Bank - 106 billion,
- Credit Suisse - 80 billion.
2018: Top 5 banks' profits top $100bn for the first time
Earnings of the five largest banks in the United States:
- JPMorgan,
- Bank of America,
- Wells Fargo,
- Citi and
- Goldman Sachs
according to the results of 2018, for the first time in history exceeded $100 billion.
Deposit insurance
Main article: FDIC (US Federal Deposit Insurance Corporation)
Crediting
Main article: Lending in the United States
Obligations
2023
Using toxic assets from bank balance sheets to secure cryptocurrencies
Crypto tools are actively used to maintain and strengthen the influence of the US dollar in the global economy in 2023. This allows for expansion without increasing public debt.
Cryptocurrencies, and in particular USDT, partially solve the problem of toxic assets that are still on the balance sheets of US and British banks after the crises of 2002 and 2008. These assets on the open market are not worth anything. But while they are on the balance sheets of banks, they are valued at the balance sheet, and not at the market, value. Well aware that it is unrealistic to sell them, bankers offer them at a huge discount to crypto projects, as collateral for loans in the crypt.
This is a very elegant solution that allows you to unload Anglo-Saxon banks and make countries and entire regions of the Third World work for crypto assets, to the real provision of which a lot of questions arise.
About half of US 4,800 banks are bankrupt because their assets are below liabilities
About half of the 4,800 US banks are bankrupt, The Times wrote in May 2023. They have assets whose value is lower than the value of their obligations. The market value of their loan portfolios is $2 trillion lower than the declared book value. Bankers acquired long-term assets, for example, with maturity after 10 years and assessed the balance sheet at the face value of these assets.
2020: Liabilities of all US commercial banks exceeded $18 trillion. or 83.7% of GDP
Chronicle
2024: Republic First Bank goes bankrupt
The bank's first collapse in the US in 2024: Republic First Bank became another small lender, bowing to pressure from higher interest rates on April 27, 2024, when it was closed by regulators and most of its deposits and assets passed to Fulton Bank.
The bankrupt lender had 32 branches in Pennsylvania, New York and New Jersey.
The bank's collapse will cost the FDIC deposit insurance fund $667 million.
2023
Failure in the US Federal Reserve's IT system blocked payment processing of the largest banks
On Friday evening, November 3, a failure occurred in the clearing house information system (ACH) of the US Federal Reserve, which blocked the processing of payments by several US banks. In particular, delays were recorded in the work of banks Bank of America, Chase, US Bank, Truist and Wells Fargo. According to the Clearing House itself, problems arose when processing 1% of daily processed payments. The failure was said to be related to human error, not a computer attack. However, early in the morning of November 5, the problems repeated themselves, which is not typical for "human error." A similar failure was recorded in the US banking system in February 2021.
The problems were recorded by the Downdetector monitoring system, which collects and analyzes complaints about various services on social networks. The system even has a separate tab on bank financial services, where you could see an increased number of angry reviews of the work of American banks. Moreover, several peaks are noticeable in the graphs at different times, which is more like a DDoS attack than a centralized ACH system failure.
ACH itself is a nationwide network similar to SWIFT, but only within the United States, through which deposit institutions send each other packages of electronic credit and debit transfers. According to the Fed, the ACH system processes about 74 million transactions daily for a total of almost $155 billion, that is, transfers worth $1.5 billion were affected by the problem. For the entire 2022, the volume of ACH transactions amounted to almost $38.7 trillion.
The Downdetector charts show that Friday's problem was quickly resolved - late in the evening the number of complaints returned to normal. Only one chart - Bank of America - shows another peak of complaints early Saturday morning on November 4th. However, on Sunday, November 5, the charts of banks such as Chase, US Bank, Truist, Wells Fargo and some others at different times recorded repetitions of a wave of angry reviews. Moreover, this peak was not recorded in the schedule of complaints against Bank of America. In addition, there are banks (such as Huntington Bank) that were not susceptible to attack but are also connected to ACH. All of the above facts speak more of "manageability" rather than the randomness of a failure, that is, in favor of a man-made attack, and not an accidental failure.
The largest banks have cut 20 thousand jobs since the beginning of 2023
In 2023, the largest US banks cut thousands of jobs. The reasons are the volatile macroeconomic environment, high inflation, crisis and uncertainty in the business sector. This is stated in the study, the results of which were published on October 19, 2023.
The headcount was reduced by Bank of America Corp., Morgan Stanley, Wells Fargo & Co. and Goldman Sachs Group Inc., CNBC reported. In total, in 2023, approximately 20 thousand employees in the US banking sector were laid off. These measures were taken after a two-year hiring boom during the COVID-19 pandemic, when there was a surge in activity on Wall Street.
 | Banks are cutting costs where they can because the outlook for 2024 remains really uncertain, "said Chris Marinac, research director at Janney Montgomery Scott. |  |
In the period from the fourth quarter of 2022 to the third quarter of 2023, Bank of America reduced the number of employees by about 1.9%. Morgan Stanley had a 2.1% decrease in headcount. Most employees fired Wells Fargo and Goldman Sachs at 4.7% and 5.4%, respectively. At the same time, Citi's number of employees during the time interval under consideration did not change, while the financial conglomerate JPMorgan Chase, by contrast, increased its staff by 5.1%.
Cuts to jobs in the financial industry could put pressure on the broader U.S. labor market. Faced with an increase in defaults on corporate and consumer loans, banks may make additional cuts in 2024, Marinak believes. The tightening of monetary policy by the Federal Reserve led to a "cooling" of the American economy, a decrease in demand for mortgages, as well as a decline in activity in the areas of mergers and acquisitions and bond offerings.[1]
Heartland Tri-State Bank bankruptcy with $130 million in assets
In July 2023, Heartland Tri-State Bank, whose assets exceeded $139 million, ceased all operations and closed indefinitely. This is the 5th bankruptcy of an American bank this year.
Three bankrupt banks - had more assets than all 25 financial institutions that collapsed during the 2008 crisis
Three American banks that went bankrupt in early 2023 - First Republic, Silicon Valley Bank and Signature Bank of New York - had more assets than all 25 financial institutions that collapsed during the 2008 crisis.
Regional banks continue to lose reserves amid an outflow of depositors' money. In addition, the US Federal Reserve has not stopped raising the key rate, which negatively affects banks.
First Republic bank bankruptcy with $229 billion in assets - second largest in US history
First Republic became the second largest bankrupt in the history of US banks. Among the biggest FDIC bankruptcies this century, three have occurred in the past few weeks, with Silicon Valley Bank and Signature Bank collapsing in early March 2023.
As of April 13, 2023, First Republic had assets of $229 billion, putting it in second place to Washington Mutual Inc., which collapsed in 2008 with assets of $307 billion and total deposits of $188 billion.
The bank's deposit assets, its loan portfolio and the huge WaMu branch network all went to JPMorgan for $1.9 billion.
US banks lost a record $389 billion in deposits in March
US banks lost nearly $400 billion in deposits in March 2023. This is the largest monthly loss of deposits in US history.
To imagine how gigantic a volume it is... From December 31, 2022 to February 28, 2023, the outflow of deposits amounted to "only" $135 billion. From March 1, 2022 to December 31, the accumulated outflow amounted to 331 billion, i.e. from March 1, 2022 to March 1, 2023 (exactly per year), the accumulated outflow - $466 billion. Over the past 4 weeks, a comparable volume has been withdrawn from 11 months before the banking crisis!
Most of the deposits - over 300 billion were distributed to money market funds and related structures, which supported the demand for bonds and allowed the Fed to resume sales.
Signature Bank bankruptcy and resumption of Fed emergency lending program
The chain reaction is realized, the infection is intensified. On March 12, 2023, a second bank collapsed, and the Fed resumes emergency lending programs.
The Fed officially announced that two days after the collapse of SVB (assets of 200 billion), another Signature Bank bank collapsed with assets of $110 billion.
The bank's management is immediately suspended, insured deposits of up to 250 thousand are guaranteed, uninsured on an auction basis with an unclear distribution criterion.
The Fed urgently resumed credit lines to banks. Additional funding will be provided through the creation of a new Bank Financing Program - Bank Term Funding Program (BTFP), offering loans for up to one year to banks, savings associations, credit unions and other eligible depository institutions.
These loans are provided under the security of treasuries, mortgage securities (MBS), agency securities (agency debt) with a face value.
The current market price does not matter, since the Fed in the new program evaluates assets exclusively at par, which, according to the plan, will become an additional source of liquidity, eliminating the need for banks to sell securities during the liquidity gap (which affected SVB).
in Ministry of Finance USA coordination with the Fed, it will allocate an additional $25 billion from the foreign exchange stabilization fund as support for BTFP.
Given the experience of credit lines in 2008 and 2020, the current Fed initiative actually means unlimited funding of banks (from hundreds of billions to plus infinity).
Interest rate expectations moved sharply down 0.5-0.6 pp, the strongest change since March 2020.
Silicon Valley Bank bankruptcy - largest since 2008
On March 10, 2023, Silicon Valley Bank became the largest American lender to collapse since the bankruptcy of Lehman Brothers on September 15, 2008, which launched a chain reaction of devastating events.
Customers were withdrawing deposits and SVB began experiencing capital shortages. The bank was forced to sell all its bonds with a loss of $1.8 billion and tried to urgently raise capital in the amount of $2 billion. But he could not raise money and collapsed.
Other American banks hardly feel much better - Bank of America's unrealized losses (gap in market value and fair value) are 43% of total capital, State Street - 27%, in Wells Fargo - 25%, in US Bancorp - 24%. Obviously, other world banks have exactly the same problem.
The collapse of the SVB occurred rapidly, which was probably a process agreed with the Fed. Read more here.
US uses secret system to track American bank transfers
In mid-January 2023, it became known that hundreds of federal, state and local law enforcement agencies USA have access to a database of more than 150 million American remittances in more than 20 countries. The newspaper writes about this The Wall Street Journal with reference to the investigation of Senator Ron Wyden and various secret documents. More. here
2022: Net interest income set an absolute high, reaching $168.6 billion in the quarter. Banks' net profit close to record of $72 billion in quarter
Trends in the US banking system for the 3rd quarter by 4746 US banking organizations.
Net interest income set an absolute high, reaching $168.6 billion in the quarter, compared with $134.5 billion a year earlier and $151.1 billion in the second quarter of 2022.
The event is unique, the Spydell Finance channel noted, because there was no such breakthrough in the modern history of the US banking system - the growth of net interest income by 25% per year, which is higher than the previous maximum (20-22%) in 1985-1986 and significantly higher than peak indicators (10-12%) in the era of the credit boom 2004-2007.
Such dynamics of net interest income is due to the outstripping growth of interest income (income on loans + income from placed funds in bonds, money market funds and deposits + interbank + placed funds in the Fed).
Interest income rose to $202.7 billion (an absolute record, rewriting a maximum of Q4 2007 - $189.6 billion) compared to $143.2 billion in Q3 2021.
Interest expenses lag significantly (all types of household, business and government deposits + repo and lending operations from the Fed + interbank + interest expenses on bank bonds, interest debt on swaps and trade operations).
Interest expenses rose to $34.1 billion in Q3 2022 against 8.7 billion a year earlier, but this is below $42.1 billion in Q3 2019. The main reason is the funding base in deposits, where interest rates are still pressed to zero, although they tend to rise.
Expenses for future/potential credit losses are growing and reach a maximum of 2019 (before covid). The histogram shows how banks created reserves in the covid crisis at the level of 2009, and then they were dissolved in early 2021.
Net loan write-offs are still at a historic low.
Net interest expenses after the creation of provisions for credit losses rose to a new record of $154 billion.
Non-interest income of banks, unlike net interest income, has frozen in the last three quarters and averages $76.7 billion ($230.5 billion in the first 9 months compared to $228.5 billion in 2021).
Non-interest income includes:
- Fees of all kinds (transactions, account maintenance, access to banking services (premium subscriptions), all other fees for direct and indirect banking services) are the most capacious category, which covers an average of 58% in the structure of non-interest income.
- Fiduciary activities - financial services related to asset management (about 14% in revenue structure)
- Remuneration for investment banking activities and commissions for external management (mergers and acquisitions, placement of shares and bonds) - an average of 8% of non-interest income
- Trading operations (stocks, bonds, currency, commodity assets) occupy about 13-14% of revenues
- Insurance transactions, including securitization under CDS (credit default swaps), CDO and other structural products - 5.3 of income.
What are the trends? The most stable category of income is commissions, which directly depend on macroeconomic trends and business activity - here stagnation.
Income from asset management decreases by 8-10% as market conditions deteriorate and asset prices decline.
Income from investment banking activities decreases by a third, but from a very high base 2021. The trend expected as IPO and corporate bond offerings zeroed, however, was expected to fall more broadly.
Revenues from trading operations are stable, despite the worst asset collapse in 15 years. The main positive contribution was made by currency trading, while on bonds record losses.
Non-interest expenses (45% of which are salaries) are steadily growing after stagnation for 7 years from 2009 to 2016.
The net profit of banks is close to a record and amounts to $72 billion for the quarter, compared with a maximum of 76 billion in Q1 2021 due to the dissolution of reserves at that time.
2020: US closes third bank since start of year
Florida state regulators shut down First City Bank of Florida in October 2020, the U.S. Deposit Insurance Corporation (FDIC) said.
2019: $0.8 trillion in accounts of foreign individuals
2015: More than 500 banks shut down in 7 years
Between 2008 and 2015, more than 500 banks went out of business. Small and medium-sized regional banks, through bankruptcy, came under the control of larger players.
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