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America will soon see a wave of bank mergers?
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Re: America will soon see a wave of bank mergers?
#12I know there are regulatory rules which partially explain the fragmented banking sector in the US compared to other nations: four example in Australia we only really have 4-5 proper banks Are there other reasons that small banks have seemed to thrive in the United States but no where else?
I would say the fact that banking is not something that is legally the authority of the federal government; even though states have seemingly acquiesced to their role and right eroding and being taken from them as the federal government persistently oversteps its bound and becomes ever more authoritarian.
It’s something even most Americans don’t even understand anymore, let alone foreigners or immigrants; that the USA is technically by design 50 countries, in an economic and organizational block for limited purposes.
The core, supreme law of the land, the Constitution is explicit that anything not explicitly delegated to the Federal government is the right of the state and the people. The vast majority of what the federal government claims rights over is not mentioned at all, let alone explicitly delegates to the federal government. Included in that, banks and regulation of banks.
Unfortunately, the founders of America were not positively explicit enough about the sovereignty of the states, probably because they had no understanding of the consolidating forces that would be introduced through things like automobiles, planes, roads, electricity, telecommunications, and computers and the internet.
The small banks thrived and why America’s banking sector was so “fragmented”, was by design, in hopes of preventing the very consolidation of power and control that the founders were so concerned about and threatens everything now. American banks were community scale, community oriented, community based, and had community accountability; all factors that restrain psychopathic tendencies of banks and bankers.
If these forces of evil that are trying to consolidate everything are not able to be stopped, by all measures things will only get worse for all of humanity from here. Just as banking has become stale and uniform and conformist without any real diversity, so will those pressures continue destroying real diversity in the world by trying to force everyone and everything into templated, repeatable objects for global uniformity.
There has been no time in human history where consolidation of power was a good thing. Monolithic things fail spectacularly. I would argue that the degree of global consolidation of power lusted after by globalists even represents an existential threat to humanity, if not all life on this planet. It creates a single point of failure and also snuffs out what makes us human, actual, real diversity of people doing different things in different places and environments, under the guise of fraudulent diversity and diversification.
Re: America will soon see a wave of bank mergers?
#13All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…
Am I too tinfoil hat to think the big 4 planned it like this all along? I guess one could ask why WOULDN’T they have meetings trying to engineer exactly what is happening?
If I had to guess, it's less so "planned" and more so that the various institutional and regulatory incentives make this sort of outcome extremely likely.
Re: America will soon see a wave of bank mergers?
#14All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…
Financial speculation is zero sum, isn't it? So the fewer banks there are the more each one gets exposed to both sides? Your bank provides services for a person who monopolises some commodity, you have billions to loan out; but all your millions of other customers are hit by the price of that commodity and all deposit less, wiping out any increase in deposits. Doesn't that mean unless they are specialised banks, that…
> Financial speculation is zero sum, isn't it?
Only if you play fair. If you can be bailed out it's no longer zero sum.
Re: America will soon see a wave of bank mergers?
#15All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…
Am I too tinfoil hat to think the big 4 planned it like this all along? I guess one could ask why WOULDN’T they have meetings trying to engineer exactly what is happening?
That doesn't really explain anything though. Every business is always trying to gain marketshare. The question then is why they are succeeding now and not before. Nobody forced SVB to put all their money into 10-year treasuries, nor did anybody engineer the tech-industry recession we've been going through (JPMC is big but Apple, Microsoft and Amazon are each bigger), both of which contributed to SVBs demise. Also the big banks tried to rescue First Republic a few weeks ago; not impossible that was some weird 4-D chess move but much more likely it was just a bailout that failed.
Re: America will soon see a wave of bank mergers?
#16All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…
You guys should be flipping cars when bank execs didn't get jail time for the financial crisis
Re: America will soon see a wave of bank mergers?
#17Re: America will soon see a wave of bank mergers?
#18Earlier quoted context omitted.
SQUIRE: When America was in its earlier days, we had a - kind of a populist suspicion about big banks. SMITH: So states looked for ways to support and protect local banks. SQUIRE: A lot of states passed what were called branch banking laws, which made it illegal to operate a bank out of more than one building. It's hard to imagine it now. And so every little town in America had its own local bank. https://www.npr.org…
this doesn't really explain it at all. The diversity in the banking system both pre-dated and post-dated those laws, and is present in states that don't have those laws and never did.
I think the first sentence can carry a lot more of the weight of explanation than you grant. There was a suspicion of big banks, which result in one particular law. But it also probably related in other rules and other behaviors.
Re: America will soon see a wave of bank mergers?
#19All of the rules put in place after 2008 are being ignored; the number of banks in the US pre-2008 financial crisis was about 31k. Now there are close to 3000. After this wave of mergers, there might be around 1000! And a few will be so large that they can make insane bets, betting on risky and novel new investment vehicles that will (maybe initially) pay off handsomely before ultimately failing dramatically. This wi…
You guys should be flipping cars when bank execs didn't get jail time for the financial crisis
Eh. We still have our entertainment and comforts to distract us. But with the greater and greater divide between the haves and have nots flipping cars might look tame when things change.
Re: America will soon see a wave of bank mergers?
#20I've said it before, I'll say it again - "too big to fail" should be recast as "too big to exist"
I'm not sure what the best solution is here, but making the big banks even bigger is not it. This is just going to make the banking system more concentrated and no concentrated market is good for anyone. Least of all because the past decade+ has set the precedent that the banks will be bailed out... If they're big enough