Graph showing how the banking industry has centralized for the last 20 years

[coindozer7]

Very interesting....
I think the banking industry is actually a pyramid scheme...

[spazzdla]

Depressing

[K3nn3th]

This is the kind of stuff that will take us into a new depression, very sad statistics.

[Spendulus]

This is the kind of stuff that will take us into a new depression, very sad statistics.

But is it true?

To answer that you'd have to have some stats on the median size of banks then and now. In other words, banks are shown which are consolidated, but those which are not are not shown, and new ones that arose are not shown.

Just asking...

[lyth0s]

I can tell you where they all join into one....the Federal Reserve Bank of New York. A shocker I'm sure

By the way, could you please tell me where you got/created this graph from directly? I see that the information was gathered from the fed, but who put it together?

[bitcoinboy163]

it's a sad story that this world is in control of the bankers.

[NXTplayer]

it's a terrible fact that this world is running in the control of bankers.

[twiifm]

no that's a graph of CONSOLIDATION not CENTRALIZATION

[theonewhowaskazu]

Its almost impossible to form a new bank is the reason. Consolidation naturally occurs, but this normally is compensated by new startups. This doesn't work in the current banking system because:

1) Reserve Requirement Laws mean that larger banks have lower requirements, means they lend a higher % of their money, means they make more profit with which to buy competitors.
2) Banking regulations make it incredibly hard to form a new bank.
3) In order to form a new bank, thanks to the FDIC and FED, both of which are owned by the big banks and thus pay the big banks dividends.
4) Thanks to corrupt lending laws, underwater defaulters still owe the amount by which they were underwater.
5) Similar regulations affect almost every other industry in the country, means either there aren't any startups at all and banks can receive guaranteed income by owning the shares or debt of companies with a monopoly, OR the small companies are forced to borrow from banks to cover the startup costs, at an even higher interest rate, causing the big banks to yet again have an advantage.

[makebitcoin]

Isn't it the fact that because of the way fiat currency is structured it needs to be centralized or else it fails. If it isn't backed by gold or something else it's intrinsic value will always go to 0. I hope you guys understand what Im saying (I'm Dutch and have some problems with my English).

[twiifm]

Isn't it the fact that because of the way fiat currency is structured it needs to be centralized or else it fails. If it isn't backed by gold or something else it's intrinsic value will always go to 0. I hope you guys understand what Im saying (I'm Dutch and have some problems with my English).

Yes that's how Central Banking works.  Banking has evovled to this state.  Its not perfect but better than the decentralized systems we had in past

[LostDutchman]

no that's a graph of CONSOLIDATION not CENTRALIZATION

Exactly!

Just as bad though!

[Snowfire]

It isn't just banks, and this phenomenon does not necessarily have anything to do with banking as such. You could draw very similar-looking diagrams for:

-the airline industry

-the railroad industry

-the media

-the beer brewing industry (microbrews excepted)

In fact, I invite anyone to do so. If there is anything these cases have in common, they are fields with low profit margins where economies of scale give a large competitive advantage; thus, centralization is favored. The end-game, of course, is when each industry has only one player left standing. In the case of the long-distance bus industry in the USA, that moment arrived years ago, when Continental Trailways ceased operations, leaving Greyhound as the sole remaining operator. I expect the railroad and airline industries to reach that point in another 20-30 years; the banking industry is actually not as far advanced as these two.