There are fewer banks operating across the country, and the five largest institutions control more than half of the industry’s assets, which is equal to almost 60 percent of GDP. The largest 20 institutions control 80 percent of the industry’s assets, which amounts to about 86 percent of GDP.
Here’s the irony: this marked increase in concentrated power, and therefore, more concentrated risk, reflects past efforts to assure greater economic stability. This might best be described as “good intentions/bad outcomes” syndrome. For example, the Federal Reserve was founded following the 1907 Banking Panic and was charged with providing liquidity support to solvent banks that were experiencing funding problems.