THE TABLE NEARBY illustrates the declinle of small and community banks since 2008 as reporter by the Federal Deposit Insurance Corporation, or “FDIC”
(Note: March, 2018 figures will be released in a few weeks; the chart reflects a Freedman’s Foundation estimate based on public filings.)
The falloff is italicized by the fact that large banks (which can more easily bear the fixed cost of regulation) continue to surge.
Indeed, a quick glance at the FDIC‘s estimates for the capitalization — see table below — show the increasing concentration of banking assets into the hands of a few institutions.
Concentration renders an industrty less competitive, less diverse, and more vulnerable to systemic shocks.
There’s also rich irony in this trend, given that one of the main goals of “banking reform” embodied in Dodd-Frank was to bring large financial institutions — those “too big to fail” — under control.
Legislative and oversight changes over the last 20 years definitely succeeded in adding regulations. They produced, however, not only unintended consequences — but in the case of large banks and the banking sector, virtually the opposite of their stated goals.