posted at 03:50
Author Name: Mike Bird
How British Banking Ended Up As A Cartel
A major report out Wednesday from the New City Agenda and Cass Business School offers a pretty brutal exposé of how retail banks behaved ahead of the financial crisis in 2008. It also breaks down how British banking ended up in its current state, with very little competition and a handful of enormous financial institutions dominating high-street banking. First of all, here's how 16 major banks and two building societies just became the five massive institutions that dominate the UK. It's reminiscent of a similar and famous chart made by Mother Jones showing just how many US banks used to exist and how they have been merged and consolidated into a series of behemoths. What about banks? In the US, thousands of small banks exist alongside the giants. At the end of the Napoleonic wars, there were more than 700 private banks, for a population of just over 10 million. Over time, they were replaced by a dwindling number of joint-stock banks. These banks merged with and acquired one another until there were very few, but the ones that did exist were large and had a lot of branches. This change, combined with the decline of building societies over the 100 years after, goes a long way to explaining why British banking looks so much like a cartel today.

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