This week’s IGM Economic Experts Panel statements:
The four largest domestic US banks currently have around 40% of the industry’s domestic assets (an average of 10% each). In early 1998, before Glass-Steagall ended and before Citicorp merged with Travelers, they held 13.2% (an average of 3.3% each). Thirty years ago, before interstate branching was fully permitted, that combined share was around 8% (an average of 2% each).
A) Capping US banks’ size so that no single bank could be larger than 4% of the sector’s domestic assets would lower systemic risk in the US.
B) The US financial system would contribute more to the average American’s welfare if the size of US banks were capped so that none could be larger than 4% of the sector’s domestic assets.