Small Banks Disappear?

So do loans to small businesses

The number of banks is down to just under 6,900. There were 7,000 a year ago.

Banking regulation adds to costs. This wipes out small banks. It subsidizes big banks.

Which banks caused the crisis of 2008? Large banks. Which banks got the lion’s share of the bailouts from Congress and the Federal Reserve? The top 6 banks.

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. The six biggest U.S. banks, which received $160 billion of TARP funds, borrowed as much as $460 billion from the Fed, measured by peak daily debt calculated by Bloomberg using data obtained from the central bank. Paulson didn’t respond to a request for comment.

The six — JPMorgan, Bank of America, Citigroup Inc. (C), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS) and Morgan Stanley — accounted for 63 percent of the average daily debt to the Fed by all publicly traded U.S. banks, money managers and investment-services firms, the data show. By comparison, they had about half of the industry’s assets before the bailout, which lasted from August 2007 through April 2010. The daily debt figure excludes cash that banks passed along to money-market funds.

The crisis made them bigger, more powerful. The bailouts were subsidies for failure.

Which banks hold 70% of all bank assets? The top 12 banks.

Who loses? Small businesses. They get loans from small banks.

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