If the past three years have been the worst since the Great Depression, why is it we didn't lose at least 30% of the banks? We didn't and the numbers don't lie.
There's a huge difference, of course, if the shrinkage is due to M&A activity where sellers used to get three times book value, rather than today's quitters who are lucky to get 10% of the value of their OREO portfolio. But it still seems to me there's some kind of regulatory control going on at 20th St. and Constitution Ave. in DC that wants to see a decline in the number of banks. So while all the attention is on the FDIC and others holding the padlocks, the Fed appears to be happy with the consistent decline so as to look more like the old countries where we all came from.
The decline has been going on forever it seems. I started tracking in 1994. Every pundit had an opinion. Some were radical, like "There will be two thousand banks in the U.S." The Jersey banker who made that prediction is now working at Jersey Shore, I think.
|Year||Number||Rate of Decline|
Conclusion: If the statisticians use three measures to determine the nature of a situation, then it would appear that 2010 at 3.65% was not that far out of their range. Pass the champagne.