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The problem with all these banks disappearing is that there are continuously fewer and fewer choices left. Eventually there will be a handful of megabanks and n
by rr888 4y ago
The problem with all these banks disappearing is that there are continuously fewer and fewer choices left. Eventually there will be a handful of megabanks and nothing else. I guess this is happening in every industry these days.
- deleted 4y ago[deleted]
- duxup 4y agoIs this an issue with specific types of banks? In the US the variety of consumer banks seems very healthy. Granted I understand there are different types and things are different elsewhere.
- wil421 4y agoExactly, I still bank at BoA due to convenience and it being my longest open account but any bank service I need is first run by my Credit Union.
- samch 4y agoWe do the exact same thing. BofA is a convenience for us, but our credit union is a safe haven with better rates, better service, and less risk.
- Scoundreller 4y agoI’m sorta the opposite, I still use my out-of-town credit union. Best investment for my life: been getting $5 every year on my initial $5 share (got in as a child) for a few decades now. Have a line of credit with a big bank that I don’t really use, but means there’s a bank everywhere I can walk into if I needed a large amount of cash or a bank draft, and I pay it off the same day.
- duxup 4y agoI switched to all credit union now. Works great for me.
- Eddy_Viscosity2 4y agoThat is the end goal, all things to be owned by a single person. They win capitalism.
- piva00 4y agoCorporate consolidation has been going strong since the late 90s/early 2000s, at least in my lifetime I saw the dwindling number of actual independent companies, the vast majority of big companies I was a customer during my lifetime have coalesced into some large conglomerate-ish... And in multiple countries, it really feels it's happening everywhere, even though seems more prominent in the USA.
- DeathArrow 4y agoWith time they'll all fusion into one mega-corp.
- pjc50 4y agoChaebol.
- cyann 4y agoBrawndo
- mtlmtlmtlmtl 4y agoThe Earth Corporate. Or E[vil]-corp for short. Edit: I realised a missed opportunity for a Mr. Robot reference.
- doitLP 4y agoBuy-n-Large
- dr_dshiv 4y agoSemi—Automated Luxury Communism, Inc
- antibasilisk 4y agoMore like Communo-Capitalism, i.e: quasi-communism operating within a nominally capitalist system
- 4y ago
- mym1990 4y agoBut what is the competitive advantage to be had between a regional bank and a megabank? I kind of love my megabank(and there are quite a few megabanks too). I can expect a branch to be in a foreign country, it provides a pretty great mobile user experience, it is well capitalized, the in person customer service has been great as well. Is it that less competition allows for companies like Wells Fargo to take advantage of their customers on a large scale? Is it that regional ones can provide fewer fees?
- haarts 4y agoWhere are you banking?!?
- mym1990 4y agoIt might have something to do with me being on the more chill side of things when it comes to customer service or other issues popping up. I'm pretty non-confrontational. I was also on the front lines of customer service for a while, those people have to deal with a lot, so I don't like to pile on.
- Red_Leaves_Flyy 4y agoCapitalism 101 explains that the consolidation of capital is necessary to maximize the capital extracted from customers. Basing our entire economy on a few average people handling the assets of billions is bound to go disastrously wrong. As we have seen cyclically for decades now. Does a bank exist that hasn’t knowingly laundered organized crime money, paid bribes, or otherwise engaged in substantial white collar crime? I cannot find one. Credit unions are superior and their disparate ownership structure is a key reason why.
- specialist 4y ago> maximize the capital extracted Cause and effect may be the reverse. Capitalism simplifies and commodifies, to extract more of the surplus. Consolidation is often rationalized with the goal to "reduce redundancies" (and passing the "savings" onto consumers, naturally).
- pjc50 4y agohttps://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2022dec/qbp.pdf#page=1 https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/... claims that there were 4,706 banks reporting to FDIC at the end of last year. If anything there are too many banks and too few big internet companies, given that you can fit the five that matter into one acronym.
- mattnewton 4y agoI’m not sure it’s fair to compare regional banks to FAANG if that’s what you mean? There are plenty of “internet” companies that don’t fit into FAANG just as there are only a few mega banks on the scale of FAANG. Or I misunderstood?
- DeathArrow 4y agoYou can always buy crypto. :D
- Red_Leaves_Flyy 4y agoOwnership, conversions, and transfers suck. To get similar utility out of crypto as banks one must sacrifice the decentralized features.
- Karunamon 4y agoI get that buying your groceries and morning coffee with crypto probably isn't happening anytime soon, but why do you single out those three things? I don't get what you mean by ownership, conversions are automated and easy (things like Uniswap), and transfers are as straightforward as transferring money could possibly be (insert recipient, insert amount, hit send). What do you mean?
- Red_Leaves_Flyy 4y agoHave you tried getting someone from nothing to setup to use all this independently? How long did it take to get them their hardware wallets, multiple backups in multiple secure locations, and various exchange accounts. How much did it cost? Not a chance in hell I’m setting up my parents or grand parents with this crap.
- ClumsyPilot 4y agoI've had enough malaria,'maybe its time to try ebola
- pixelpoet 4y agoNo way, crypto is a scam and Ponzi scheme! Totally unlike banks getting bailed out with taxpayer money and giving exec bonuses etc.
- lettergram 4y agoBanking is an industry where it’s not difficult to break up. (1) ensuring only $250k should ensure capital is spread (2) the above hasn’t been happening, so people are moving to big banks because the government bails them out (3) regulations are such that smaller banks have to go through an insane amount of work to get to a “big bank”. Basically the big players have a moat. They’ll get bigger because they control / design regulation. It helps consolidation. Smaller banks can’t enter (4) it doesn’t help some (maybe all) of these big banks are also board members of the fed. For instance Jamie Dimon of JP Morgan [1] where they funnel support to their corporations (5) to fix, there’s a lot of options. (a) Simple one is to limit the amount of assets a bank can hold. They currently only do that for the smaller banks (not the big ones) (b) audit the fed directed by congress (there’s a lot of inner dealing there) (c) create a graduated tax based on asset (as it increases systemic risk) (d) good old fashion anti-trust breakups [1] https://www.newyorkfed.org/newsevents/news/aboutthefed/2010/oa100205 https://www.newyorkfed.org/newsevents/news/aboutthefed/2010/...
- nindalf 4y agoThis is a consequence of computers + internet. 2 ways in particular: 1. Large organisations become unwieldy - computers help track and tame that complexity. 2. Geographically distributed organisations have trouble communicating and can be outcompeted in a region by a company focussing on that region. The internet helps reduce the friction in communication. Once both of these started getting adopted in the 90s and 00s, big companies became more competitive relative to smaller ones.
- dd36 4y agoAnd the lack of antitrust enforcement in the last 40 years.
- hirako2000 4y agoAnd the increase of lobbies and their increasing efficacy in getting tailored legislation adopted. Arguably as politics has become more and more a business. Not just in the U. S
- hotpotamus 4y agoMonopolies and robber barons are hardly a new phenomenon. In fact, I've seen the term "robber baron" derided as an anachronism. I suppose oligarch or plutocrat are the modern terms. Nevertheless, economics 101 (literally I had to sit through this in freshman intro economics) will tell you about forces that drive businesses towards consolidation.
- yamtaddle 4y agoPretty sure it's mostly a regulatory thing. The East India Company was pretty big and operated globally. And they didn't even have electricity. Ditto the Catholic Church.
- ren_engineer 4y agodon't worry, just buy your Federal Reserve CBDC and keep up your social credit score so they don't unperson you with no recourse. End game is the Fed tracking everything you do financially via their digital currency, this is almost classic Hegelian dialectic where you now have a manufactured crisis to get people begging for CBDC
- jcadam 4y agoCBDC will be easier to implement if we can kill all these pesky small and medium sized banks...
- checkcircuits 4y agoIf you paid attention the last week or so there have been a lot of accounts here promoting the fed bank as a solution. You are correct and I agree with your assessment for what it's worth. Dozens of banks collapsing has two outcomes. Centralization into TBTF banks or a fed bank. Given the desire to manipulate currency further with CBDC I would suspect the modern money "theorists" in congress are salivating.
- cjbgkagh 4y agoIn accounting; the Big 8 -> the Big 5 -> the Big 4. EY is looking a bit precarious as they seem to be the goto firm for fraudulent companies so we may end up with the Big 3.
- red-iron-pine 4y agothere was a time when the government had the guts to actually regulate and break things up. capitalism works when there is competition, otherwise it's just an oligarchy with ever-worsening terms and conditions.
- bryanlarsen 4y agoMatt Yglesias makes the case that the answer is more megabanks. https://www.slowboring.com/p/america-needs-more-giant-banks https://www.slowboring.com/p/america-needs-more-giant-banks
- bannedbybros 4y ago[dead]
- losvedir 4y agoI feel like we're missing a key part of banking infrastructure: somewhere to just park cash. Start-ups who raise a Series A aren't looking to earn 1% on it - it seems silly that they can't really do anything with it that doesn't take on risk, and that FDIC insurance for just storing cash only goes up to a low amount. Sure, in the old days when money was physical and there were costs involved in storing it and transporting it that makes sense. But these days, I feel like I'd like to just be able to have an account straight at the Federal Reserve or something, which doesn't earn any interest, but lets me keep my cash sitting there without any risk of a run or anything like that. But generally, I don't think I really need a bank. I want somewhere to temporarily store any amount of cash (Federal Reserve), and somewhere else that I can invest what I want, if I'm looking for a return, with some risk, on my money. Neither of those are really roles of a bank, right?
- andrewmcwatters 4y ago> Sure, in the old days when money was physical and there were costs involved in storing it and transporting it that makes sense. ??? This never stopped being the case. Banks receive deposits and make loans. They are core pieces of modern banking. They play a role in increasing the monetary supply through debt servicing.
- HDThoreaun 4y agoThe government doesn't want you to "just park cash" because it makes monetary policy difficult and loans more expensive. Predictable and cheap credit is an necessary part of a functioning modern economy so the Fed incentivizes(forces) banks to use deposits to make loans.
- andy_ppp 4y ago> I feel like we're missing a key part of banking infrastructure: somewhere to just park cash. We're going to need a bigger mattress...
- ghiculescu 4y agoDon’t read this: https://www.chicagobooth.edu/review/safest-bank-fed-wont-sanction https://www.chicagobooth.edu/review/safest-bank-fed-wont-san... It will make you angry.
- dgb23 4y agoIs that really true? There are also new banks popping up here and there that grow very rapidly due to a more software/tech focus. And there are smaller more specialized banks that have been doing well (in Switzerland). There is at least one very recognizable co-op bank here and another one with a focus on sustainability.
- bumby 4y agoFor the conspiratorially minded, this is a feature, not a bug. The theory is that the creation of the current central banking system was, in part, to wrest power from the growing influence of regional banks back to the megabanks.
- checkcircuits 4y agoIt's not a theory nor is it a conspiracy insofar as it is lacking evidence. The collapse during the great depression was used to sell the fallibility of the small banks. Senator Aldrich took the bill written by the wealthiest bankers in America straight to congress to form the fed. It's relatively well known in fact [0]. Once you realize that was the intention to begin with the structure of modern banking starts to make a lot of sense. [0] https://www.federalreservehistory.org/essays/jekyll-island-conference https://www.federalreservehistory.org/essays/jekyll-island-c...
- ulrikhansen54 4y agoNew ones will emerge (eventually)
- SheddingPattern 4y agoCredit Suisse is a top 50 bank while SVB doesnt even make the top 100. SVB dissapearing leads to a lack of choice. Credit Suisse may pose a genuine global systemic risk.
- johnbellone 4y agoTaco Bell.