Too big not to despise

Statistics about the largest financial institutions' earnings make it hard to like them

Richard Drew / AP / File
In this file photograph taken July 19, 2010, traffic passes the headquarters of Morgan Stanley in New York. The six biggest financial institutions are taking on an increasingly large share of banking transactions.

I linked to this op-ed by M&T Bank CEO Robert Wilmers this morning but in case you missed it, I've pulled out some of the juiciest morsels because, in and of themselves, they are mind-blowing:

• In 1990, the six largest financial institutions accounted for 9 percent of all U.S. domestic deposits. As of Dec. 31, 2010, the six biggest banks accounted for 36 percent of deposits.

• In 2010, the six largest bank holding companies generated $56.1 billion in trading revenue, or 74 percent of their $75.7 billion in pretax income.

• The Big Six institutions earned more than 93 percent of the trading revenue generated by all American banks during the past two years.

• In 1929 compensation for employees in the financial-services industry was just 1.5 times that of the average nonfarm U.S. worker. By 2009 employees in the securities and investments sector earned 3.4 times as much as an average U.S. worker.

• The CEOs at the top six bank holding companies were paid an average of $26 million in 2007, or 516 times the U.S. median household income. Those bank CEOs are paid 2.3 times the average total CEO compensation of the top Fortune 50 nonbank companies.

No matter how many times one hears these stats or in what permutation, they are still infuriating. Especially when you consider that the FDIC, Federal Reserve and Treasury are backstopping and supporting this activity. None of it has anything at all to do with banking. These are hedge funds with branches.



Wilmers: Small Banks, Big Banks, Giant Differences (Bloomberg)

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