The Value and Strength of America’s Largest Financial Institutions

Updated September 2018 (Download as a PDF)

Our value to the economy

Forum member institutions support economic growth by lending to consumers, businesses, and other financial institutions, and foster deep and liquid capital markets that allow the U.S. government and private institutions to finance public spending and investment.

 

Supporting Savings and Investment Through Lending

Total Lending

Forum members hold more than $4 trillion in loans, accounting for 43 percent of total lending to businesses and households.

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Small Business Lending

We are a major source of lending to small businesses, helping the economy grow at both a community and national level.

 

Forum members provide $86 billion in business loans less than $1 million, representing one-quarter of all such loans to small businesses.

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

We also provide $54 billion in business loans less than $100,000, representing a third of all such loans to small businesses.

 

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Lending to Other Financial Institutions

We meet three-quarters of the funding needs of other financial institutions. Lending to financial institutions supports the needs of community banks, insurance companies and mortgage finance companies, which provide important services to businesses and households.

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Lending to Consumers

We provide nearly half of all consumer loans. Consumer lending supports loans for a variety of household needs, including automobile purchases and college tuition.

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx
Note: FASB Statements 166 and 167 resulted in the consolidation of large amounts of securitized loan balances back onto banks’ balance sheets in the first quarter of 2010. Although the total amount consolidated cannot be precisely quantified, the industry would have reported a decline in loan balances for the quarter absent this change in accounting standards.

 

Commercial and Industrial (C&I) and Real Estate Lending

We have increased C&I lending in each of the past eight years, accounting for 40 percent of total C&I lending in the market.  We also account for roughly 35 percent of real estate lending.

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Supporting Deep and Liquid Capital Markets

Total Debt and Equity Underwriting Activity

Our members underwrite nearly three-quarters of debt and equity transactions—such as initial public offerings—among large institutions in the U.S., providing a critical service that other U.S. institutions cannot offer on a similar scale.

Our underwriting activities:

  • foster deep and liquid capital markets
  • support corporate investment in the real economy
Source: FR Y-15 data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

Note:  The data cover debt and equity underwriting for all holding companies with total consolidated assets in excess of $50 billion

 

Managed Funds

With $3 trillion of assets under management, we support retirement and other saving needs.  This represents 19 percent of assets under management in the United States.

Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Municipal Securities Holdings

A construction site.

 

With roughly $163 billion in municipal securities holdings, we finance a significant portion of state and local government expenditures, such as hospitals, roads, bridges, and schools.

  • Our holdings of municipal securities also foster liquid secondary markets, thus improving the ease and cost with which state and local governments can access capital markets and finance public spending and investment.
Sources: Federal Reserve data, Assets and Liabilities of Commercial Banks in the United States – H.8, available at https://www.federalreserve.gov/releases/h8/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

U.S. Treasury Securities

With nearly $550 billion in U.S. Treasury securities holdings, we also finance a significant portion of federal government expenditures. 

  • Our holdings of U.S. Treasury securities also foster liquid secondary markets, thus improving the ease and cost with which the U.S. government can access capital markets and finance public spending and investment.
Sources: Federal Reserve data, Financial Accounts of the United States – Z.1, available at https://www.federalreserve.gov/releases/Z1/current/default.htm; FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Improvements in resiliency, resolvability, and supervision

We have substantially improved our capital and liquidity positions in the past several years.  In addition, a number of regulatory and supervisory changes have led to further improvements in our resiliency and resolvability.

Improvements in Capital and Liquidity

Improvements in Tier 1 Capital and Resiliency

We have significantly enhanced the quality and quantity of our capital over the past nine years.  Since 2010, Tier 1 capital has increased by nearly 40 percent and has grown as a share of risk-weighted assets and total capital. Our members currently maintain $900 billion of Tier 1 capital.

Both dollar amounts of capital and capital ratios have improved markedly since 2010, and the share of capital accounted for by high-quality Tier 1 capital has improved markedly.

Source: FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

 

Improvements to Liquidity Profile

We have also greatly increased our liquidity profiles and now hold more than $2.5 trillion in high-quality liquid assets (HQLA).  Since 2010, HQLA has doubled.

  • We have substantially increased HQLA, both in dollar amount and relative to total assets.
  • Increased liquidity complements increased capital and improves resiliency to adverse shocks.

 

Source: FR Y-9C data, available at https://www.ffiec.gov/nicpubweb/nicweb/HCSGreaterThan10B.aspx

Note:  HQLA is reported according to Basel III at the Bank Holding Company level

 

Improvements in Regulation and Supervision

 

Additional Regulatory and Supervisory Developments

In conjunction with significantly higher levels of capital and liquidity, several post-crisis regulatory and supervisory reforms have greatly increased the resiliency of the U.S. financial system.

  1. Enhanced Supervision: Increased supervision at member institutions further promotes safety and soundness
  2. Orderly Liquidation Authority (OLA): A new legal and structural framework for resolving large banks lowers the cost of resolving a member institution
  3. Living Wills: Members have undertaken an extensive review and planning process designed to improve their resolvability under bankruptcy
  4. Total Loss-Absorbing Capacity and Long-Term Debt Requirements: New requirements to issue long-term debt and equity support the OLA resolution process
  5. Derivative Reforms: Mandates for central clearing, margin, and recognition of stays reduce systemic risks from derivatives

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