The era of mega banks – The growth of too big to fail. American banking system still backing over $13 trillion in assets with a negative deposit insurance fund. 7,760 banks but 19 banks make up 50 percent of the asset base

The growth of the too big to fail bank is something that is modern to this era.  In the 1990s there were fewer than 40 institutions that had total assets above $20 billion.  In the late part of the 1980s and 1990s this number was below 20.  The peak was reached in 2005 with 55 institutions having more than $20 billion in total assets.  That number has fallen in recent years because of the crisis yet we have a handful of banks that control most of the nation’s banking assets.

 The total U.S. banking system as of today supports over $13 trillion in total assets.  The FDIC insures these deposits with a deposit fund that is negative so it might as well be supported by pure faith.  What makes up most of these assets are residential and commercial real estate loans.  As we have discussed banks have yet to come to terms with the reality that many of these loans are not worth what they claim they are.  First, let us look at the growth of too big to fail.

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