American banks: rating, basic information, historical background

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Today there is practically no country in the world where the banking sector is not active enough. It goes without saying that, depending on the degree of development of the state itself, absolutely all of its financial institutions have the appropriate force. In the article we will study the leading banks in America. A list of the largest banks in this country will also be presented.

General information

Initially, any bank is strictly focused on lending to the population and various businesses. The “money vault” also pays interest to people who invest their money in it for the purpose of saving and making a profit. In a word, American banks are the real arteries of the financial system of both their country and the whole world. Without the normal operation of these structures, life can become much more complicated for any modern person.

Historical background

US banks and the banking system of this state are to some extent a copy of the European similar scheme, but there are still differences.

The pioneers of the US banking sector are Philadelphia financiers who showed their enthusiasm back infar from us in 1781, when the Bank of North America was created. And by the middle of the 19th century, the number of such companies in the country had reached three hundred.

In 1863, there were manifestations of the first state regulation in the banking segment. It was at this time that the so-called National Monetary Act was adopted, which contributed to the creation of the state currency in the United States.

In 1874, several more legal documents were adopted, because of which the right to issue money was received only by those American banks from which a charter was obtained and they were given the status of a national financial institution. The rest of the banks could only operate within the boundaries of their state.

Federal laws

Shortly before the start of the Great Depression in 1927, a member of the US House of Representatives, Louis McFadden, put forward a proposal, which his colleagues eventually voted for, which was that national banks were forbidden to create interstate networks and should work only on a strictly limited territory. Thus, the government tried to equalize the chances of all players in the financial market. But already in 1994, he annulled this law and determined the possibility for state authorities to decide for themselves how banks would work in their zone of influence.

Basic changes

The Great Depression caused many banks to close daily. As a result, the country's leadership in 1933 adopted the Glass-Steagall Act, thanks to which the US banking system received an impetus todevelopment and on the basis of which it works to this day. The essence of this legal document is as follows:

• American banks have been banned from trading in securities, except for transactions at the request of clients and in favor of clients (the so-called trust management).
• Establishment of the Federal Deposit Insurance Corporation. Simply put, all deposits over 5,000 must be insured.
• Revise the requirements for national banks to be included in the Fed.

It is worth noting that this act was revised in detail in 1999, when the Law on Financial Modernization was adopted, which made it possible for banking and financial holdings to carry out both investment and insurance activities.

Leading table

US banks, whose rating will be given below in the article, are the absolute leaders on the planet in terms of their capitalization, although competitors from the Middle Kingdom are close behind them. Chinese financial giants also have a powerful monetary "fist".

So, the list of foreign banks for a Russian person (that is, US financial institutions) looks like this based on Forbes Global 2000:

• JPMorgan Chase - based in New York State with $2,594 billion in assets as of 2015.
• Bank of America has the largest customer network in the US, with over 60,000 branches nationwide and approximately 18,700 ATMs.
• Citigroup –has about 241 thousand employees in its ranks.
• Wells Fargo is headquartered in San Francisco. The bank is focused on serving private clients and is quite far from investment activities.
• U. S. Bancorp is essentially a diversified financial holding headquartered in Minnesota.
• The Bank of New York Mellon - the bank has representative offices in 36 countries and is engaged in asset management and securities trading, and also provides treasury services.
• SunTrust Banks - in addition to insurance and loans, the bank is actively engaged in mortgages. Branch network covers southern states such as Alabama, Arkansas, Georgia, Virginia, Maryland, Tennessee and Florida.

Today

Commercial American banks in the USA are classified in the modern world as follows:

• By the degree of presence in the country: federal and state.
• By distribution: having no branches and having a whole network of branches.

In June 2018, the US Federal Reserve conducted "stress tests" and came to the unequivocal conclusion that the 35 largest banks in the country have enough money to easily withstand the most severe financial crisis.

According to the Fed, under a 10% unemployment scenario in the country, US banks will suffer losses of about $ 578 billion, but the reserves of financial institutions would remainin this situation at a level above the required minimum. This testing was carried out as part of the Dodd-Frank reform, which was launched several years ago, and whose goal was to increase the level of capitalization of banks in order to confidently withstand other crises in the future.