The banking system in the US is becoming more concentrated b

The banking system in the U.S. is becoming more concentrated, but we started with many, many banks. Why is this? That is, why does the U.S. generally have more, and smaller, banks than other, similar countries? For that matter, why do we have 12 different branches of our central bank, i.e. the 12 branches of the Federal Reserve System?

Solution

Bank regulations in United States is highly fragmented compared with other countries. While most of these countries have only one bank regulator, in U.S. Banking is regulated at both the federal and state level. Depending on its type of charter and organizational sturcture a banking organization is subject to many numerous federal and banking regulations. Unlike Japan and U.K , the U.S. maintains seperate securities ,commodities, insurance regulatory agencies at the federal and state level. U.S. Banking regulation addresses privacy , disclosure, fraud prevention, antI money laundering and promotions of lending to lower income group

The federal Reserve system is the central bank of united states. It was founded by congress in 1913 to provide the nation with safer ,more flexible , and more stable monetary and financial system. Over the years it\'s role in banking and economy has expanded. A network of 12 federal Reserve bank and 24 branches make up the federal Reserve system under the general oversight of the board of governors. Reserve bank\'s are the operating arms of the central bank.