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Who's Ready for a Pop Quiz...

Dear Clients & Friends,

To say March was a busy month for the banking sector is an

understatement. With the collapse of Silvergate Capital , Silicon Valley Bank,

and Signature Bank followed by the near-death experience of First Republic

and multiple regional banks, the terms “banking contagion, collapse, and

failure” reappeared in everyday top google searches. Mark Twain said it best:

“History never repeats itself, but it does often rhyme.” March 2023 seemed to

be reminiscent of the 2008 financial fiasco, with several bank runs,

government bailouts, congressional hearings, etc. Let me reiterate what Matt

has stated previously: we at MORWM don’t believe that this is another

2008. These bank collapses were very specific and niche situations that don’t

represent the entirety of the banking world. Their depositor base was not

diversified from a geographical or depository standpoint, as they

predominantly catered to the crypto, fast-growing tech , and startup

communities. The key point here is that diversification matters!

We wanted to take this opportunity to provide some key statistics about our

countries current banking sector. As my finance professor repeatedly says:

“Pop Quiz, anyone?”

According to the Federal Deposit Insurance Corporation (FDIC), the United

States has the most banks in the world, with a total of 4,135 banking

institutions and 71,190 branches. This is down from 4,237 institutions and

72,444 branches in 2021. Who can guess which country comes in “close”

second place? Our friends in the United Kingdom, with a total of 311 banking

institutions. You read that correctly!

Let’s review this from a per capita basis. The United States has around 12.8

banks per million people. While the U.S. ranks towards the top of that

hierarchy, countries such as Luxembourg, Switzerland, and Singapore outpace


Who can guess how many banks we had back in 1980? According to the FDIC,

we had a total of 14,434 banks. We can clearly see that banking institutions in

the United States underwent massive consolidation, as 10,208 banks are no

longer with us, and the expectation is that this trend will continue in the

coming years.

Now, let’s look at the United States and our largest banks. As of mid-March,

bank deposits totaled ~$15.37 trillion. The five largest banks in terms of

deposits are: JP Morgan (~15.2%), Bank of America (~12.6%), Wells Fargo

(~9.0%), Citigroup (~9.0%), and US Bancorp (~3.4%). These five banks

account for ~49% of total bank deposits, with the remaining banks accounting

for the rest. When we include the next five largest institutions (PNC, Truist,

Goldman Sachs, Charles Schwab and Morgan Stanley), the top ten account for

nearly 60% of bank deposits. Let’s compare these numbers to 2021: the top

five banks accounted for ~61.0% of total deposits while the top ten banks

represented ~71.8%. For the record, Silicon Valley and Signature Bank each

accounted for ~1.1% of deposits in 2023.

Enough of the pop quiz! Here’s the real question. In your opinion, is the United

States overbanked? I’ll let you be the judge but let us know what you think.

On a side note, if anyone has any questions about FDIC coverage for your

bank accounts, the mechanics behind FDIC insurance, or how to increase your

coverage, please feel free to reach out to us! We’ve had various questions

about this topic so don’t be shy if you do.

Onward and upward,


*Data provided by Y Charts and FactSet


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