History of Bank in Timeline
Banks are financial institutions that manage money for the public and facilitate lending. They accept deposits, creating demand deposits, and use those funds to provide loans. These loans can be made directly to borrowers or indirectly by participating in capital markets.
1979: Establishment of the Federal Financial Institutions Examination Council (FFIEC)
In 1979, the Federal Financial Institutions Examination Council (FFIEC) was formed as an inter-agency body with the authority to establish standardized principles, standards, and reporting formats for the federal examination of financial institutions. The FFIEC's creation aimed to enhance regulatory consistency among agencies, although rules and regulations continue to evolve.
1985: Bank Mergers and Acquisitions
Between 1985 and 2018, banks participated in approximately 28,798 mergers and acquisitions, serving as either the acquirer or the target company. The total known value of these deals amounted to around 5,169 billion USD.
1999: Bank Mergers and Acquisitions
The year 1999 marked a significant period for bank mergers and acquisitions, with the total value of deals reaching approximately 460 billion USD. This surge in activity reflects a broader trend of consolidation within the banking industry during that time.
2004: Bank Branches in Europe
In 2004, Germany, France, and Italy each had over 30,000 bank branches, surpassing double the number of branches in the United Kingdom, which had 15,000.
2007: Financial Crisis and the Introduction of CoCos
In 2007, following the financial crisis, regulators mandated banks to issue Contingent Convertible bonds (CoCos) to mitigate risk and bolster bank capitalization.
2007: Bank Mergers and Acquisitions
In 2007, the banking sector experienced a surge in mergers and acquisitions, with the total value of deals reaching approximately 460 billion USD. This peak in activity was followed by a significant decline in subsequent years.
2008: Impact of Brokered Deposits on Bank Failures
During the global financial crisis of 2008, banks in the United States that relied heavily on brokered deposits faced significant challenges. These banks, which failed during this period, had an average of four times more brokered deposits as a percentage of their total deposits compared to the average bank. This reliance on brokered deposits, coupled with risky real estate investments, contributed to the savings and loan crisis of the 1980s.
2008: Financial Crisis and the Introduction of CoCos
In 2008, as part of the response to the financial crisis, regulators required banks to issue Contingent Convertible bonds (CoCos). These bonds are designed to absorb losses when a bank's capital falls below a certain threshold.
2008: Global Banking Assets and Profits
In the 2008-2009 financial year, the assets of the world's 1,000 largest banks increased by 6.8% to a record US$96.4 trillion, while profits plummeted by 85% to US$115 billion. The growth in assets despite adverse market conditions was largely attributed to recapitalization efforts.
November 2009: Bank Branches in China
As of November 2009, China's four largest banks had over 67,000 branches collectively. This included over 18,000 branches for ICBC, over 12,000 for Bank of China, over 13,000 for China Construction Bank, and over 24,000 for Agricultural Bank of China. Additionally, there were 140 smaller banks with an unknown number of branches.
2009: Global Banking Assets and Profits
During the 2008-2009 financial year, global banking assets reached a record US$96.4 trillion, representing a 6.8% increase. However, profits experienced a significant decline of 85%, dropping to US$115 billion. This growth in assets despite challenging market conditions was primarily driven by recapitalization efforts. Additionally, global investment banking generated US$66.3 billion in fee revenue, reflecting a 12% increase from the previous year.
2009: Impact of Brokered Deposits on Bank Failures
In 2009, amidst the global financial crisis, banks in the United States that had a high proportion of brokered deposits experienced difficulties. On average, banks that failed during this period held four times more brokered deposits as a percentage of their total deposits compared to the average bank. This reliance on brokered deposits, along with risky real estate investments, played a role in the savings and loan crisis of the 1980s.
2015: Bank Branches in the United States
In 2015, the United States had the highest number of banks globally, with 5,330 institutions and potentially as many as 81,607 branches. This large number of banks and branches highlights the country's geographical and regulatory landscape, characterized by numerous small to medium-sized institutions within its banking system.
2018: Bank Mergers and Acquisitions
Between 1985 and 2018, the banking industry witnessed around 28,798 mergers or acquisitions, with banks acting as both acquirers and targets. The combined value of these transactions reached approximately 5,169 billion USD. Notably, there were two significant waves of mergers and acquisitions in 1999 and 2007, both peaking at around 460 billion USD. However, this was followed by a steep decline of 82% from 2007 to 2018.
March 2023: 2023 Global Banking Crisis
In March 2023, the global banking system experienced a crisis marked by liquidity shortages and bank insolvencies. This resulted in the failure of three banks in the United States, and within two weeks, several of the world's largest banks also failed or were closed by regulators.