Essay on US Banking System

                    Federal Reserve System is the central bank of US. It has 12 branches around America. It was setup in 1913 as a response to banking crisis of 1907. Its initial purpose was to increase the stability of US banking and financial system. However, with the passage of time its role has enhanced. It is an independent body. The Federal Open Market Committee of Federal reserve determines the US monetary policy. There are 12 regional Federal reserve banks that helps controlling the money supply. The Federal Reserve can alter the money supply in US through open market operations, which is buying or selling of government securities. (Simpson n.d)

Regional Federal Reserve Banks                                                Total Assets[1]

Federal Reserve Bank of Boston                                                $ 87,093 million

Federal Reserve Bank of New York                                            $ 1,999,699 million

Federal Reserve Bank of Philadelphia                                        $ 105,118 million

Federal Reserve Bank of Cleveland                                            $ 126,343 million

Federal Reserve Bank of Richmond                                            $ 287,757 million

Federal Reserve Bank of Atlanta                                                 $265 million

Federal Reserve Bank of Chicago                                               $ 219,261 million

Federal Reserve Bank of St. Louis                                              $ 64,219 million

Federal Reserve Bank of Minneapolis                                         $ 37,724 million

Federal Reserve Bank of Kansas City                                         $ 64,000 million

Federal Reserve Bank of Dallas                                                  $ 191,602 million

Federal Reserve Bank of San Francisco                                     $ 22,509 million

A current number of Commercial banks in the USA is 4687[2].

Percentage of Government-owned banks= 12/4687= 0.26%

The 5-Bank concentration ratio of US banks is 46.58%.[3] So the five biggest banks of the United States controls nearly half of the US banking industry.

These banks are as follows,

Total Assets

JPMorgan Chase JPM                                         2.62 Trillion

Bank of America BAC                                          2.34 Trillion

Wells Fargo                                                         1.87 Trillion

Citigroup                                                              1.93 Trillion

US Bancorp                                                         2.34 Trillion