Even since the global financial crisis, the five largest U.S. banks have managed to grab hold of more of the financial sector than ever before - increasing their assets by over 150 percent in just the past 8 years. Photo: Alamy http://bit.ly/1ZOcWXI

Seven years after the start of the financial crisis and the biggest U.S. banks are bigger than ever (and growing).

Stephanie Fontana is former Research Intern at Oxfam America.

I’ve been learning a lot about the U.S. financial sector recently and was surprised to realize that the five largest U.S. banks – JP Morgan Chase Bank, Bank of America, Citibank, Wells Fargo Bank, and US Bank – control nearly half of all assets in the U.S. banking sector. For those who have been working in this field for some time, this news may not be surprising. But what is perhaps most distressing is that this trend was not stopped – or even really slowed – by the financial crisis, and the five biggest banks continue to grab hold of a larger and larger share of total banking assets over time.

The U.S. banking sector is enormous, holding $15.8 trillion in assets – 26 percent of the total for U.S. multinational enterprises across all industries. A small number of massive banks dominate this powerful industry with the five largest banks collectively holding $6.9 trillion in assets – 44 percent of total U.S. bank assets as of the end of September.

Since 1992, the total assets held by the five largest U.S. banks has increased by nearly fifteen times! Back then, the five largest banks held just 10 percent of the banking industry total. Today, JP Morgan alone holds over 12 percent of the industry total, a greater share than the five biggest banks put together in 1992.

Even in the midst of the global financial crisis, the largest U.S. banks managed to increase their hold on total bank industry assets. The assets held by the five largest banks in 2007 – $4.6 trillion – increased by more than 150 percent over the past 8 years. These five banks went from holding 35 percent of industry assets in 2007 to 44 percent today.

As these big banks accumulate more and more money, the vast majority of Americans have been stuck with the same median wage since 1999. Citing the 2014 wage report by the Social Security Administration (SSA), David Cay Johnston points out that pre-tax incomes for 90 percent of taxpayers were the same in real terms in 2013 as they were in 1966. So, as economic conditions remain stagnant for most Americans, the largest U.S. banks continue to hold an ever increasing amount of assets.

These trends are troubling in the context of rapidly rising economic inequality. Worldwide, the top 1% of people own more wealth than everyone else combined. Inequality is staggering within the U.S. as well. According to a report released last month by the Institute for Policy Studies, the richest 20 Americans own more wealth than the bottom half of Americans. For the top 20, this wealth averages to $36 billion per person, but for the bottom half, it is just $4,575 each. The authors of the IPS report think that these numbers are even underestimating the levels of inequality as more and more wealthy individuals and institutions hide their assets using offshore tax havens and legal trusts.

As resources become highly concentrated in the hands of fewer and fewer individuals and institutions, the imbalance threatens economic, political, and social inclusion. These massive banks use their wealth to wield significant political and economic power in the U.S., in the countries where they operate, and in the international arena.

For example, bank lobbyists worked hard to dilute the strength and prevent the successful implementation of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, one of the most significant financial regulatory reforms since the Great Depression. In explaining “How Wall Street Defanged Dodd Frank,” Gary Rivlin found that in 2012 the five main consumer protection groups had 20 lobbyists supporting financial reform while the five main finance industry groups sent over 400 lobbyists to Capitol Hill to delay, dilute, and dismantle the reforms. With the financial industry spending more than $1 billion to prevent reform, only about 40 percent of Dodd-Frank’s 400 or so provisions were finalized a full three years after its adoption.

Big bank lobbying efforts have also contributed to the sharp rise in the concentration of banking assets – a rise which stems from regulatory changes favoring the financial sector in the 1980s. Large banks exerted their political power to push for less regulation of the financial sector, and this period saw the removal of regulations preventing banking activity across state lines and requiring the separation of deposit-taking, insurance, and investment banking in different legal entities, among many others.  The changes led to unprecedented consolidation of the financial sector with single institutions operating across the industry to provide household and commercial banking, insurance, and investment services.  Over this period of deregulation, the Federal Deposit Insurance Corporation (FDIC) data show that the number of commercial banks and savings institutions in the U.S. dropped by 64 percent from 17,901 in 1984 to 6,509 in 2014. At the same time, the value of industry assets increased by over 400 percent.

This trend is rapid and troubling. As financial reform advocates continue to fight for greater consumer protections and reversal of this trend, more voices are needed. Add yours.