Sunday, September 28, 2008

Concentration Risk Among U.S. Deposits

With JP Morgan acquiring WaMu's deposit base, they rocketed above Citigroup as the biggest bank in terms of deposits. This increases concentration among the largest five deposit holders to a massive 45% by market share (assuming $7 Trillion in total deposits), but I'm not so convinced that bigger is better.

And further concentration is likely... per CNNMoney.com:

Wachovia is reportedly mulling a deal with another large bank, including Citigroup and Spain's Banco Santander, according to reports published Friday afternoon.
Should Citi and Wachovia merge, the big 3 (Citi, JP Morgan, and Bank of America) would combine for almost $3 Trillion in total U.S. deposits.

Just another data point as to why additional regulation and oversight is so important...

Source: Infectious Greed