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

  • Economic Outlook_video
  • Economic Outlook: The global economy is expected to continue expanding at a moderate pace over the coming two years, but policymakers must ensure that instability in financial markets and underlying fragility in major economies are not allowed to derail growth.Click to watch the video.
  • OECD Forum 2014
    A public event that brings together all sectors of society to share policies and ideas to help shape responses to global challenges.
    Join us on 5-6 May.
  • "There is no shortcut to equipping people with the right skills and to providing them with opportunities to use their skills effectively."

    - Andreas Schleicher, Special Advisor on Education Policy to the Secretary-General, OECD Yearbook 2014

  • Data Lab Image
  • Interactive charts showing aid (ODA) provided by DAC members; by recipient countries and by sector. Click to compare your country.
  • OECD Insights Blog
    OECD Insights Blog by Brian Keeley:
    Results are out for the OECD’s PISA student assessments on “creative problem solving”.
  • Better Life Index
    How do you measure a Better Life?
    On 5 May, the OECD will be launching a new interactive infographic where visitors can explore the priorities of people worldwide. Be a part of it. Create and share your Better Life Index.

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

OECD Insights Blog

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

All rights reserved. OECD 2014