THE COMMERCIAL BANKING MARKET STRUCTURE

The structure of the US banking system is unique in comparison with those of other countries around the world. The banking structure is often characterized by size distribution or by type of banks in the industry. As of the end of 1990, there were 12,672 insured US commercial banks operating in the United States, while in other countries a far smaller number of banks dominate in their domestic markets.

For example, in the UK six nationwide retail banks, together with seven regional retail banks, operate more than 12,000 branches throughout the country, dominating the domestic retail banking market. Similarly only eleven domestically chartered banks in Canada are major players in the domestic market, with over 7,000 branches nationwide. In Japan, there are seventy-five commercial banks which dominate retail and corporate banking markets. Out of this total number, eleven banks are so-called «city» banks having nationwide branches and the remaining sixty-four are «regional» banks.

Many US commercial banks are rather small. About 6,400 US banking organizations (almost two- thirds of the total) had an asset size of less than $50 million. These banks as a whole held about 5.9 percent of the total banking assets of $2,597 billion then. Meanwhile, there were only 262 banking organizations which had an asset size of over $1 billion and they together held about 75 percent of total assets in the banking industry. Even among these relatively large banks, the size variation was substantial, ranging from $1 billion to over $200 billion.

Another unique aspect of the US banking industry is the so-called dual banking system. By this we mean that there are two parallel regulatory structures in chartering, supervising, and examining banks in the United States. One side of the regulatory structure consists of the state regulatory agencies and their regulatory systems and the other side consists of three federal agencies, namely the Office of the Comptroller of.