18 Sep 2013

How US Banks have pumped $10 trillion of debt into the US economy since 1992

Here's a great website. It's called US Banks Locations and it provides tables with numbers for the value of the assets held by every single US bank. You can get new sets of figures every 3 months (the latest are from the end of June 2013), and the data goes back to 1992.

It's fairly hard work, but I have downloaded all the data and added up the numbers for each year. You also get to see every single bank individually, and you get to see the number of banks as well.

As you can see, the financial assets of US banks totaled $4.6 trillion at the end of 1992. But by the end of 2012, the number had reached over $14.5 trillion. Where had all that "money" come from? Was it people depositing their savings with the banks?

Almost certainly not. The vast majority of the $10 trillion of extra assets corresponds to money that the commercial banks created out of thin air and then used to buy assets or make loans. Lending money to someone so that they can buy a house means that the bank increases its assets, even if they didn't actually have the money they lent.

Of course, certain banks have been particulary active. For example, JP Morgan's assets have increased  18-fold from $109 billion in 1992 to $1.95 trillion in 2013.

But the other fascinating bit of information that you can get by looking at this dataset is that the number of banks has plumetted. From 13,973 at the end of 1992, the number has halved to just 6949 in June 2013. Where did all those bank go? Of course, 6949 is still a huge number, and it's roughly the number of banks in Europe.

Unfortunately, I've not yet managed to find an equivalent set of data for the 6000+ European banks. Leave me a message if you know where to find such information.

No comments:

Post a Comment