A comparative analysis of the US and EU retail banking markets - Wsbi

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The decline of savings institutions over the same period was more abrupt, registering a fall of 61%. This was the direct result of the savings and loans crisis of the early 1980s, when around half of all US savings and loans institutions became insolvent. The decline in the number of credit unions has been less marked for the period 1985-2003 than the two other types of institutions, with a fall of 38%. Graph 1: Evolution of the number of depository institutions per 1,000,000 inhabitants in the US 160 140 120 100 80 60 40 20 0 1985 1990 1995 1996 ■ Commercial banks ■ Savings institutions ■ Credit unions (CU) 1997 1998 1999 2000 Source: ESBG calculations based on data from FDIC, NCUA and the US Census Bureau. 2001 2002 2003 As graph 1 above reveals, on a per capita basis, while in 1985 the US had 139 institutions per 1 million inhabitants, by 2003 that number had more than halved to 64 credit institutions per 1 million heads of population (see table A in table annex for figures relating to graph). 400 350 300 250 200 150 100 50 0 The number of branches of credit institutions in the US has grown from 89,509 branches in 1995 to 99,807 in 2003, an increase of 12%. The increase in the number of branches was twice as strong in the first half of that period (+7.5%) as compared to the latter half. Graph 2: Evolution of the number of branches of depository institutions per 1,000,000 inhabitants in the US 1995 1996 1997 ■ Commercial banks ■ Savings institutions ■ Credit unions (CU) 1998 1999 2000 2001 2002 Source: ESBG calculation on the basis of information from FDIC, CUNA and the Census Bureau. 2003 On a per capita basis, the picture is quite different as the total number of branches per 1 million heads of population has remained rather stable over the period, as can be seen in graph 2 above, with 336 branches recorded in 1995, and 343 in 2003 (see table B in table annex for figures relating to the graph). 5.2.1.1.2 Number of branches Table 2: Evolution of the number of branches of depository institutions in the US 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 Commercial banks 42,970 50,017 56,028 57,258 59,773 61,394 63,101 63,487 64,965 65,584 66,766 Savings institutions 20,966 18,708 13,424 13,826 13,030 12,831 12,882 12,478 12,549 12,313 12,361 Credit unions (CU) n.a. n.a. 20,057 20,921 21,453 20,620 20,262 20,399 20,192 20,383 20,680 Total excl. CU 63,936 68,725 69,452 71,084 72,803 74,225 75,983 75,965 77,514 77,897 79,127 Grand Total n.a. n.a. 89,509 92,005 94,256 94,845 96,245 96,364 97,706 98,280 99,807 Sources: Federal Deposit Insurance Corporation (FDIC): Historical statistics on banking (HSOB); CUNA (Credit Union National Association) estimates. 76
5.2.1.2 European Union 5.2.1.2.1 Total assets At end 2003, the EU 15 banking sector totalled €22,098 ($26,297) billion in assets. 5.2.1.2.2 Number of institutions Graph 3: Evolution of the number of credit institutions in the EU, per Member State 14,000 12,000 10,000 8,000 Between 1985 and 2003, the total number of credit institutions operating in the European Union declined by 41%, from representing 12,679 institutions in 1985 to 7,444 in 2003. Sweden, France and Germany experienced the biggest declines in that period, of 59%, 55% and 53% respectively. The largest banking sectors in 2003 in terms of the number of credit institutions were Germany (decrease from 4,740 in 1985 to 2,225 credit institutions in 2003) and France (from 2,109 in 1985 to 939 institutions in 2003) while Italy, the UK and Spain had, respectively, 801, 426 and 348 credit institutions in 2003 (see graph 3 below and table C in table annex for figures relating to graph). 6,000 4,000 2,000 0 1985 1990 1995 1996 ■ Germany ■ France ■ Austria ■ Italy ■ United Kingdom ■ Netherlands ■ Finland ■ Spain 1997 1998 1999 2000 2001 ■ Portugal ■ Denmark ■ Sweden ■ Luxembourg ■ Belgium ■ Ireland ■ Greece 2002 2003 Source: ECB; From 1985 until 1996: "Mergers and acquisitions involving the EU banking industry", December 2000; From 1997 until 2003: "Report on EU Banking Structure", November 2004. Table 3: Evolution of the number of credit institutions per 1,000,000 inhabitants in the EU, per Member State 1985 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 Belgium 17 16 14 14 13 12 11 11 11 11 10 Denmark 32 24 23 24 40 40 39 39 38 33 38 Germany 61 59 46 45 42 39 36 33 31 29 27 Greece 4 4 5 5 5 5 5 5 6 6 5 Spain 18 18 12 11 11 10 10 9 9 9 8 France 38 36 25 24 22 21 20 19 18 17 16 Ireland 16 14 15 17 19 21 21 21 23 21 20 Italy 21 20 17 16 16 16 16 15 15 14 14 Luxembourg 321 460 534 530 509 496 487 460 437 410 381 Netherlands 6 7 7 6 41 40 39 37 35 33 30 Austria 164 157 131 128 116 112 109 106 104 102 100 Portugal 22 26 23 23 24 22 22 21 21 19 19 Finland 133 106 74 73 68 67 67 66 71 71 70 Sweden 65 58 13 14 27 25 24 24 24 24 25 United Kingdom 12 11 10 9 9 9 8 8 7 7 7 EU 35 34 26 25 26 25 24 22 21 20 19 Source: ESBG calculations on the basis of data from the ECB (see Graph 3 above) and Eurostat (for the population). 77
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September 2006 RESEARCH A COMPARATI
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IE UK FR BE NL LU DK DE SE CZ AT SL
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The following WSBI/ESBG committees
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4 Regulation and supervision compar
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6.5 Issues of competition in retail
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To finish, if we had to pick from a
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In the US, credit institutions have
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Following the same logic, the EU co
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In that context, it is tempting to
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3. INSTITUTIONAL COMPARISON 3.1 Sec
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The market share of the US banking
Page 25 and 26: FDIC-insured commercial banks are i
Page 27 and 28: The subsidiary stock institution is
Page 29 and 30: Regulatory reform over the past thi
Page 31 and 32: State credit unions were first exem
Page 33 and 34: There has however been much effort
Page 35 and 36: 3.2.2.2.2.2 Ownership and corporate
Page 37 and 38: Hermann Schulze-Delitzsch and Fried
Page 39 and 40: In contrast, building societies in
Page 41 and 42: The commitment of savings banks is
Page 43 and 44: 4. REGULATION AND SUPERVISION COMPA
Page 45 and 46: In addition, for regulations define
Page 47 and 48: The European Parliament has to be k
Page 49 and 50: In fact, it should be mentioned her
Page 51 and 52: As far as coordination at the feder
Page 53 and 54: Despite the trend towards the estab
Page 55 and 56: Another important factor in the cho
Page 57 and 58: In the European Union, contrary to
Page 59 and 60: Although younger than CESR, both CE
Page 61 and 62: 4.2.5.1.1.1.1 Limitation of the geo
Page 63 and 64: 4.2.5.1.1.3 Recent trend: regulatio
Page 65 and 66: Another important common feature be
Page 67 and 68: The best execution rule was first m
Page 69 and 70: 4.3.2.2.4 National Market System ru
Page 71 and 72: The ISD set a basis for the develop
Page 73: Best execution rules exist in both
Page 78 and 79: Relative to population, the Europea
Page 80 and 81: 5.2.2 Size of credit institutions 5
Page 82 and 83: 5.2.2.2 European Union In Europe, t
Page 84 and 85: 5.2.3 Concentration and consolidati
Page 86 and 87: 5.2.3.2 European Union Average CR5
Page 88 and 89: In terms of the nature of consolida
Page 90 and 91: 100% Graph 9: Structure of the asse
Page 92 and 93: In terms of growth of the volume of
Page 94 and 95: 5.3.2 Efficiency of credit institut
Page 96 and 97: Table 16: Evolution of the Return o
Page 98 and 99: Finally, looking at cost-income rat
Page 100 and 101: 9. The last couple of decades have
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Page 104 and 105: Furthermore, the average outstandin
Page 106 and 107: Under an open-end credit, the credi
Page 108 and 109: Table 19: Evolution of outstanding
Page 110 and 111: 6.2.1.2.2 Regulatory framework over
Page 112 and 113: 6.2.1.3 Comparison 6.2.1.3.1 Size o
Page 114 and 115: In terms of market competition, the
Page 116 and 117: The residential mortgage market in
Page 118 and 119: Funding by retail deposits represen
Page 120 and 121: In sharp contrast, the US mortgage
Page 122 and 123: 6.2.3.1.2 Lenders to small business
Page 124 and 125: The securitisation process requires
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Factoring is also continuously gain
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6.2.3.2.4 Securitisation of small b
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The above fears can hardly be allay
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- ACH credits and debits: the stati
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6.3.2.1.2 Financial intermediaries
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It should be noted that two of the
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Assuming that technology, globalisa
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The report adds: “although it bou
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Graph 19: Use of different distribu
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In terms of funding of the business
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Since then, established banks have
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MoU Memorandum of Understanding OTC
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Annex 2: Statistical appendix Table
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Table F: Share of US banking indust
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Table L: Structure of the liabiliti
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Table R: Number of ATMS in the EU a
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F - Federal Deposit Insurance Corpo
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