Four banks dominate the US banking sector; they have developed out of a group of 37 individual institutions that operated in 1990.
This chart compiled by Exposing the Truth takes data from the Federal Reserve and the Government Accountability Office to show how 37 banks have closed, disappeared, merged, sold and squeezed in 19 years between 1990 to 2009 into four mega institutions which have benefited from the ‘too big to fail’ umbrellas.
The US financial sector in 1990 drew a starkly different landscape from the one we see in 2014. The 1990s brought in many changes in regulation, precipitated by the financial crisis of the late 1980s. The introduction of the Basel Capital Accord in 1988 changed how financial institutions assess and counter risks. Technology was little used in retail banking in 199; on-line banking was undeveloped, mobile banking was merely a twinkle in a WAP developers eye.
The nature of banking was different. Institutions were smaller, they served a localised clientèle, whether state wide or city wide or regional. Banks had personality; clients could talk to the manager, who had more control over how a branch ran. My regulatory knowledge of banking back in mid 90s US is limited, I own, so I do not know how many banks were closed by regulators for compliance failures, or were censured for gross misconduct or criminality.
Compliance and regulation specialists use examples of how regulators and regulatory penalties have forced institutions to close in the past. Wachovia, the bank which laundered cash for Mexican cocaine trafficking cartels, made it through to the final stages of the 19-year competition, losing out to Wells Fargo only in 2008.
I would be interested to hear from readers how many more of these 37 institutions were forced out of the market as a result of poor market practice resulting in a breach of regulations or legislation.