Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. CHAPTER 12 Commercial Banking Structure, Regulation, and Performance

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. FDIC-Insured Banks, March 31, 2001 DepositsAssets Number of(in Billions(in Billions Banksof Dollars)of Dollars) Total domestic banks8,237$5,764.57$6, National charter2,2013, , State charter6,0362, , Fed member 9801, , Non-Fed member5,0561, , SOURCE: Federal Deposit Insurance Corporation.

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. Regulatory Responsibilities FDIC:Regulates state-chartered, insured non-Fed members and insured branches of foreign banks Comptroller of Regulates national banks that are not bank holding companies and federally the Currency:chartered branches of foreign banks Fed:Regulates state-chartered, insured members of the Fed, all bank holding companies, all financial holding companies, and branches of foreign banking organizations operating in the United States and their parent bank States:Regulates state-charted, non FDIC-insured banks that are not Fed members SOURCE: Federal Deposit Insurance Corporation

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. Bank Failures since the Inception of the FDIC, Number of Failures, SOURCE: Federal Deposit Insurance Corporation

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. Size Distribution of FDIC-Insured Banks as of June 30, 2001 $100 million4, $ %3.5% $100 million – $1 billion3, $1-$10 billion >$10 billion *4, * Total8,178100%100%$6, %100% *Percents may not sum to 100% because of rounding. SOURCE: Federal Deposit Insurance Corporation. Percent of Total Percent of Total* Cumulative Percent* Total Assets Cumulative Percent Asset Size Number of Institutions

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. Allowable Activities for Bank Holding Companies (Federal Reserve Regulation Y- Revised January 1, 2001) Making, acquiring, brokering, or servicing loans, issuing and accepting letters of credit Real estate and personal property appraising Commercial real estate equity financing Check-guaranty services Collection agency services Credit bureau services Asset management, serving, and collection activities Acquiring debt in default Real estate settlement services Leasing personal or real property Operating nonbank depository institutions Performing trust company functions Financial and investment advisory activities Providing feasibility studies Agency transactional services Investment transactions as principal including underwriting and dealing in government obligations, money market instruments, foreign exchange, forward contracts, options, futures, option on futures, swaps, and similar contracts Management consulting and counseling activities Courier services Printing and selling checks, deposit slips, etc. Insurance agency and underwriting Community development activities Issuing money orders, savings bonds, and traveler’s checks Data processing SOURCE: Federal Reserve System, reserve.gov/regulations/default.htm

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. The Giants: Banks and Bank Holding Companies 1.Bank of America, National AssociationCharlotteNC584,284,000 2.Citibank, N.A.New YorkNY382,106,000 3.Chase Manhattan Bank, TheNew YorkNY377,116,000 4.First Union National BankCharlotteNC231,837,000 5.Morgan Guaranty Trust Company of New YorkNew YorkNY185,762,000 6.Fleet National BankProvidenceRI166,281,000 7.Wells Fargo Bank, National AssociationSan FranciscoCA115,539,000 8.Bank One, National AssociationChicagoIL101,228,538 9.Suntrust Bank, Inc.AtlantaGA 99,528, U.S. Bank National AssociationMinneapolisMN 82,023, HSBC Bank USABuffaloNY 80,121, Keybank National AssociationClevelandOH 77,760, Bank of New York, TheNew YorkNY 74,266, Firstar Bank, National AssociationCincinnatiOH 72,593, Wachovia Bank, National AssociationWinston-SalemNC 69, State Street Bank and Trust CompanyBostonMA 64,643, PNC Bank, National AssociationPittsburghPA 63,185, Wells Fargo Bank Minnesota, National AssociationMinneapolisMN 53,117, La Salle Bank, National AssociationChicagoIL 48,852, Branch Banking and Trust CompanyWinston-SalemNC 46,991, Southtrust BankBirminghamAL 45,170, Bankers Trust CompanyNew YorkNY 44,324, Regions BankBirminghamAL 43,528, Merrill Lynch Bank USASalt Lake CityUT 43,171, Mellon Bank, N.A.PittsburghPA 41,974,315 SOURCE: Federal Financial Institutions Examination Council at the Internet site Banks Ranked by Total Assets as of March 31, 2001 RankName CityStateTotal Assets (K)

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. The Giants: Banks and Bank Holding Companies Banks Ranked by Total Assets as of March 31, 2001 RankName CityStateTotal Assets (K) 1.Citigroup, Inc.New YorkNY953,427,000 2.J. P. Morgan Chase & Co.New YorkNY712,702,000 3.Bank of America CorporationCharlotteNC625,524,000 4.Wells Fargo & CompanySan FranciscoCA289,758,000 5.Bank One CorporationChicagoIL272,412,000 6.First Union CorporationCharlotteNC245,941,000 7.Taunus CorporationNew YorkNY216,513,000 8.FleetBoston Financial CorporationBostonMA202,113,000 9.U.S. BancorpMinneapolisMN165,156, ABN AMRO North America Holding CompanyChicagoIL164,699, HSBC North America Inc.BuffaloNY107,445, Suntrust Banks, Inc.AtlantaGA100,822, National City CorporationClevelandOH 95,247, KeycorpClevelandOH 85,522, Bank of New York Company, Inc., TheNew YorkNY 76,831, Wachovia CorporationWinston-SalemNC 74,828, State Street CorporationBostonMA 70,317, PNC Financial Services Group, Inc., ThePittsburghPA 70,034, Fifth Third BancorpCincinnatiOH 69,833, BB&T CorporationWinston-SalemNC 64,733, Comerica IncorporatedDetroitMI 49,494, Southtrust CorporationBirminghamAL 46,534, Regions Financial CorporationBirminghamAL 45,392, Mellon Financial CorporationPittsburghPA 43,705, MBNA CorporationWilmington DE 40,418,814 SOURCE: Federal Financial Institutions Examination Council at the Internet site

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. The Declining Number of Banks *As of June 30, 2001 SOURCE: Federal Deposit Insurance Corporation. Institutions

Copyright © 2003 by South-Western/Thomson Learning. All rights reserved. Commercial Banks’ Declining Share of Intermediation *As of June 30, 2001 SOURCE: Budget of the U.S. Government-Fiscal Year 1993: “Modernizing the Financial Services Sector,” U.S. Government Printing Office (1992): 259. Figures for 1995 are from Flow of Funds Account, Z1, Fourth Quarter 1995 (March 8, 1996): 72 and Flow of Funds Accounts, Z1, Second Quarter, 2001 (September 18, 2001): 58. Share of All Intermediary Assets * Year 100% 80% 60% 40% 20% 0 6% 52% 22% 20% 38% 20% 28% 31% 13% 47% 26% 12% 53% 23% 7% 63% 6% 14% 9% 7%