Banks in the balance

Whether or not you believe they have been reformed enough, few institutions have received as much attention during the current economic crisis as banks.

But how much money do they really control and how can their behaviour affect our economies so much?

Total assets of the largest banks as a share of GDP increased rapidly in major OECD countries in the years leading up to the financial crisis, says Bank Competition and Financial Stability. In contrast, in emerging economies, which were affected by the crisis to a lesser degree, the asset-to-GDP ratio was stable. In the case of China, the ratio actually decreased ahead of the financial crisis.

The proportional increase in assets of the largest French and British banks is particularly noticeable in the late 1990s and 2000s, with the three biggest British banks holding assets worth almost 340% of the UK’s GDP on the eve of the global financial crisis and 260% for the French big three. In 1995, the figure for both countries was less than 80%.

Some of the competitive practices in the banking system (or lack thereof) may have exacerbated the crisis, according to the report, while the authors warn that some government policies–for instance, enforced mergers–may have adverse consequences for competition.

Access Bank Competition and Financial Stability online

See also www.oecd.org/finance

  

©OECD Observer No 286 Q3 2011




Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Editor's choice

  • Events at the OECD: Click on the image to get the full calendar.
  • 5 things you might not know about the state of Amazonas. The World Bank identifies the main colossal challenges Brazil's biggest state is facing.
  • Gender mainstreaming: French young lady working in an engine assembly plant. Women and men on the same boat when it comes to job insecurity. © Raphaël Helle / Signatures / La France VUE D'ICI
  • The Asian Development Bank together with the International Labour Organization challenge the concept of women's work in Asia and the Pacific.
  • Gender wage gap
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.
  • Composite leading indicators
  • 2015, a year full of dangers? Laurent Bossard, director of the Sahel and West Africa Club, acknowledges that the situation in the region is complex and unstable but refuses to give in to fatalism.
  • The 5th Anti-corruption conference for G20 governments and business in Istanbul on 6 March will address how all businesses can play their part in contributing to growth and investment, and can operate with clean hands in a safe environment.
  • Success story. Discover the story of this young Ethiopian woman who launched a successful business in the footwear industry and became a UN Goodwill Ambassador for Entrepreneurship.
  • Transports in Asia. The Asian Development Bank advocates sustainable transport in a continent where vehicle ownership is perceived as a sign of social success.
  • Vote for your favourite photograph! This World Bank #EachDayISee photo contest aims to display visual stories from all over the world through which people express what they would like to see changed and improved.
  • Why is investment so low in the euro area? This short IMF blog post gives you an insight into the causes of the euro-zone's drastic decline in investment.
  • Have your say! The UN wants to know what matters most to you: pick six global issues in the list and send it to the United Nations.
  • Tim Harcourt Video
  • Clear air and healthy lungs: how to better tackle air pollution. From New Delhi to Accra, millions of people breathe polluted air. A new report examines the World Bank’s experience working to improve air quality.
  • The boring secret of great cities. Plenty of things make a city great but what really makes a difference originates in the structure of municipal government according to the OECD's report "The Metropolitan Century".
  • Guinea gets $37.7 million in extra IMF financing to help combat Ebola
  • G20 and Australia: Economist Tim Harcourt speaks to the BBC about how Australia has gone from "Down Under to Down Wonder".
  • World Water Day: 22 March 2015 For World Water Day, UN-Water identifies upcoming challenges and sets the theme for the years to come. In 2015, the theme for World Water Day is Water and Sustainable Development.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Poll

What issue are you most concerned about in 2015?

Euro crisis
Unemployment
Global warming
International conflict
Other

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2015