From exceptional to normal: changes in the structure of US banking since 1920

Abstract

A century ago the US commercial banking system was exceptional in two ways. It was by good measure the largest commercial banking system of any country. And it was different from the commercial banking systems of other leading countries in having tens of thousands of independent banks with very few branches rather than the more typical pattern of a far smaller number of banks with many branches. Today, a century later, the US system is more normal than exceptional, dominated by a small number of very large banks with extensive branch systems. This article describes the US banking-structure transition from exceptional to normal. It closes with an interesting contrast of US and European banking developments.