- Financial Survival Network
- Posts
- International Bank Study, Using 150 Years of Data, Shows Mega Banks Like the Big Four in the U.S. Produce Financial Instability and More Severe Crises
International Bank Study, Using 150 Years of Data, Shows Mega Banks Like the Big Four in the U.S. Produce Financial Instability and More Severe Crises
by Pam Martens and Russ Martens Wall Street on Parade
It took eight years of research to compile a data set of annual balance sheets of more than 11,000 commercial banks dating back to 1870 in 17 advanced economies. And in every country, the study arrived at the same finding: concentrating the banking system in the hands of five or less giant banks leads to financial instability and more severe financial crises. The bank balance sheets of the following countries were examined: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States.
The 150-year banking study is titled: “Survival of the Biggest: Large Banks and Financial Crises.” Its authors are Matthew Baron of Cornell University; Moritz Schularick of the Kiel Institute for the World Economy and Sciences; and Kaspar Zimmermann of the Leibniz Institute for Financial Research SAFE.