Where Have All the American Banks Gone?
— December 1, 2015
By Richard Sylla and Robert E. Wright
Contrary to common perceptions of reckless banking, most of America’s defunct banks exited via merger rather than outright failure and bankruptcy. True, that is partly because the FDIC, one of the regulators of almost all US-based banks since the 1930s, often aids failing banks by arranging mergers with stronger institutions. Most merger activity, however, stems from the age-old affinity of American banks for increasing their size and decreasing their competition whenever and however possible. The common perception of the fragility of the US banking system, however, is not entirely wrong: over the course of US history, 23 thousand banks failed, most in gobs associated with the infamous financial panics of the nineteenth century and the even more infamous banking crises of the Great Depression.
The disappearance of so many US banks, mostly by being absorbed into larger institutions, prompted us to write Genealogy of American Finance (2015). The book contains short, illustrated histories of the 50 largest financial holding companies recently operating in the United States, along with their “family trees”, that is, charts showing all the predecessor institutions that were acquired or merged together to form the current behemoths. Often these charts are so large that they do not fit on the large-sized pages of our book, but thanks to modern information technologies, they can be accessed at the website of the Museum of American Finance, which sponsored the project.
Read full article as published in The World Financial Review.
Richard Sylla is the Henry Kaufman Professor of the History of Financial Institutions and Markets