Stats of the day


= percent of U.S. bank assets controlled by the four largest commercial banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo; source: Martin Wolf in the FT).  That four-firm concentration ratio is up sharply from 39% in Feb. 2003 (source: Frederic Mishkin’s money and banking textbook, ~2004 edition).

$2.7 million

= money received by Obama chief economist Larry Summers for 40 speaking appearances before bailout-receiving Wall Street financial institutions in 2008.   Now, Summers is a brilliant man with lots of policy experience to share, but how likely is it that these cash-strapped firms were paying just for his insights and not even trying to buy access to Obama’s top economic adviser?  The White House would have us believe that access had nothing to do with it:

‘A White House spokesman, Ben LaBolt, said the compensation was not a conflict for Mr. Summers, adding it was not surprising because he was “widely recognized as one of the country’s most distinguished economists.”’

Some have already called for breaking up the biggest financial institutions, to the point where none of the ones remaining are “too big to fail,” and then letting market discipline or effective regulation keep them in line.  All well and good, but these stats, especially the last two, recall the original 19th century rationale for antitrust action:  The biggest firms just have too much political power.  Small is not only beautiful, but small firms are less likely to be writing the laws of the land.

Tags: , , , , , ,

3 Responses to “Stats of the day”

  1. demoommie Says:


    Perhaps a PR firm could come in and help out the poor fat cats. A new nickname, something other than “Robber Barons” would be a start. Public hangings would work for me, but I’m such a curmudgeon!

  2. Ranjit Says:

    Brings to mind a letter I saw in the Financial Times a few days ago (alas, the accompanying picture is not available). But I suppose turning “fatcat” into “fat cat” arouses some sympathy, as many people can think of an obese feline or two of whom they are fond. The letter:

    Let’s at least get our insults right

    Published: April 3 2009 03:00 | Last updated: April 3 2009 03:00

    From Mr Robert Gentle.

    Sir, Your banker-bashing columnists love to talk about fat cats (“From the fat cats to long tails: when all is not normal”, John Kay April 1). I’m all for a bit of banker-bashing myself, but let’s at least get our insults right.

    A fat cat is a portly feline creature. A fatcat – the word you’re looking for – is an obscenely paid executive. In fact, I know a fatcat who has a fat cat!

    Robert Gentle,
    Johannesburg, South Africa

    Copyright The Financial Times Limited 2009

  3. democommie Says:


    You might get a kick out of this post over at scienceblogs:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: