3 This fact can be seen in figure 6, which shows the number of new charters each year (in blue, with squares to mark yearly values), the actual annual change in the number of community banks (in green, with triangles), and what the annual change in the number of banks would have been in the absence of new entry (in red, with circles), over the past 20 years.
As bankers, you know that dependence on diversified funding sources such as money market instruments and long-term foreign currency borrowings is invariably more risky than dependence on vanilla deposits. On the assets side, secured loans and advances, which are the standard fare of commercial banks, carry lower risk than the investments that are likely to dominate the balance sheets of merchant banks.