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The banking industry is being deconstructed, piece by piece

Irene Rinaldi for Quartz
  • John Detrixhe
By John Detrixhe

Future of finance reporter

How many big banks does the world really need?

Not nearly as many as it did before 2008, when titans like Lehman Brothers ceased to exist, and others became a shadow of their former selves. Government watchdogs have since devised rules that make banks less likely to spin out of control, but also much less profitable. Interest rates have fallen through the floor in many countries, drying up the margin between bank deposits and loan rates—a core money-maker for lenders.

They are not exactly starving, but the pie has shrunk. A handful of mostly American banking giants—the likes of JPMorgan, Bank of America, and Citigroup—sit at the head of the table, at or near the top in the market-share rankings for trading, dealmaking, consumer banking, and much else besides. They may have more revenue and higher valuations than everyone else, but life is not necessarily easy. Everyone is questioning the big banks’ business models, trying to figure out how to make money in a world where regulation and technology have changed the game.

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