While "too big to fail" banks are under growing pressure to slim down
or pull back operations, they also face more opportunities to expand at
home and abroad as European rivals withdraw into a defensive stance.
As a result, banks could swell further. And the industry already is more top heavy than it was before the financial crisis.
Assets of the top 10 bank holding companies totaled $11.3 trillion at the end of Q1 2012, or 84% of GDP. Before the absorption of Merrill Lynch, Wachovia, Lehman Brothers, Bear Stearns, Washington Mutual, Countrywide and others, the top 10 had $8.1 trillion at the end of Q2 2007, or 62% of GDP.
New U.S. and international regulations put in place since the financial crash are forcing banks to raise more capital as well as limit what funds can be at risk. Bank of America (BAC), for instance, sold $33 billion in assets last year and has put its overseas wealth-management unit up for sale.
But Wells Fargo (WFC) and Citigroup (C) have been buying U.S. assets of European banks, which are scrambling to shore up their books amid bank solvency fears.
Recent loan officer surveys by the Federal Reserve also show U.S. banks are benefiting from reduced foreign competition.
Read more: http://news.investors.com/article/617854/201207111847/bank-giants-may-be-too-big-to-get-bigger.htm?src=HPLNews
As a result, banks could swell further. And the industry already is more top heavy than it was before the financial crisis.
Assets of the top 10 bank holding companies totaled $11.3 trillion at the end of Q1 2012, or 84% of GDP. Before the absorption of Merrill Lynch, Wachovia, Lehman Brothers, Bear Stearns, Washington Mutual, Countrywide and others, the top 10 had $8.1 trillion at the end of Q2 2007, or 62% of GDP.
New U.S. and international regulations put in place since the financial crash are forcing banks to raise more capital as well as limit what funds can be at risk. Bank of America (BAC), for instance, sold $33 billion in assets last year and has put its overseas wealth-management unit up for sale.
But Wells Fargo (WFC) and Citigroup (C) have been buying U.S. assets of European banks, which are scrambling to shore up their books amid bank solvency fears.
Recent loan officer surveys by the Federal Reserve also show U.S. banks are benefiting from reduced foreign competition.
Read more: http://news.investors.com/article/617854/201207111847/bank-giants-may-be-too-big-to-get-bigger.htm?src=HPLNews
No comments:
Post a Comment