Report provides some detail on nearly $35 trillion in assets supervised by Federal Reserve

On page eight, in “Table A” of “Box 1” of the Federal Reserve’s Supervision and Regulation Report, appears a mundane-looking table stuffed with text and a few numbers.

On closer look, the table reveals some jaw-dropping facts, including: The Federal Reserve supervises and/or oversees 5,320 institutions which, among them, hold $34.6 trillion in assets.

The institutions include: the largest U.S. banks (the “global systemically important banks,” or GSIBs), foreign banking organizations with “large and complex U.S. operations,” other large and foreign banking organizations, large insurance companies  – and (the lion’s share) “community banking organizations.”

(In the graphic: Total assets under supervision by Federal Reserve, by types of institutions; total number of institutions under supervision by Fed, by types of institutions)

To put things into perspective: The assets overseen by the Fed are 25 times greater than all of those held by the nation’s credit unions (with $1.4 trillion), and twice as much as those at all federally insured banks (with $17.5 billion); both are as of June 30.

For even greater perspective: The gross domestic product (GDP) of the U.S. is equal to 56% of the assets overseen by the Fed. And according to World Bank figures, the Fed-supervised assets are about 43% of the world’s GDP. If the assets supervised by the Fed made up the GDP of a separate country, that country would have the world’s largest economy, based on World Bank statistics.

(In fact, the Fed assets-under-supervision number would have been even larger had Prudential Financial Inc. – with nearly $1.4 trillion in assets under management – still been on its list of GSIBs. However, the Fed granted the “de-designation” of the GSIB label last month, following the decision by the Financial Stability Oversight Council [FSOC] to drop the company from its list of “systemically important financial institutions,” or SIFIs).

None of this may be breaking news, but the figures do illustrate the outsize influence that the Fed’s decisions on supervision has (or can have) on the globe.

The largest share of the assets supervised by the central bank are those held by eight U.S. GSIBs and four foreign banking organizations (FBOs) with large and complex U.S. operations. Together, the institutions hold 34.7% in assets (or $12 trillion, according to the Fed report). The eight GSIBs are: Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street, and Wells Fargo. The four FBOs are Barclays, Credit Suisse, Deutsche Bank, and UBS. The financial institutions are overseen at the Fed by the Large Institution Supervision Coordinating Committee (LISCC).

The 183 large and foreign banking organizations (LFBOs) that are not among the LISCC members hold the next largest share of assets, with 21.7% (or $7.5 trillion). (These institutions are defined by the Fed as non-LISCC U.S. firms with total assets of $50 billion and greater, and non-LISCC FBOs).

Others holding a significant share of the assets include: large banking organizations (LBOs, “non-LISCC U.S. firms with total assets $50 billion and greater”), with 10.4% ($3.6 trillion); large foreign banking organizations (large FBOs, “non-LISCC FBOs with combined U.S. assets of $50 billion and greater”), 9% ($3.1 trillion); community banking organizations (CBOs, “total assets less than $10 billion”), 6.9% ($2.4 trillion); Regional banking organizations (RBOs, “total assets between $10 billion and $50 billion”), 4.6% ($1.6 trillion); and insurance and commercial savings and loan holding companies (SLHCs, those primarily engaged in insurance or commercial activities), 3.2% ($1.1 trillion).

Rounding out the remaining 9.5% are: state member banks (SMBs) within LFBO organizations (2.9%, $1 trillion); small FBOs (FBOs with combined U.S. assets less than $50 billion), 2.3% ($800 billion); and SMBs within LISCC organizations, LFBO organizations and CBO organizations, each 1.4% ($500 billion).

Community banking organizations (CBOs) account for the largest number of institutions overseen by the Fed, according to the table, with more than 76% (4,047 institutions). SMBs within CBO organizations, the chart shows, account for nearly 14% (742). The rest of the organizations named in the report round out the remaining 10%.

Supervision and Regulation Report (November 2018)

 

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