Question

Saving, Investment, and the Financial System: By the Numbers

The financial system consists of banks, money markets, and government institutions that issue and manage money. Although the United States is the largest economy in the world, it does not have the largest banks in the world in terms of total assets.

Consider the accompanying tables which list the world’s ten largest banks in terms of assets in 2008 and 2017.

Top Banks in the World by Assets, 2008

Rank	Bank	Country	Total Assets 2008 ($ billions)
1	Royal Bank of Scotland Group	UK	3,515
2	Barclay	UK	3,004
3	Deutsche Bank	Germany	2,896
4	BNP Paribas	France	2,729
5	HSBC Holdings	UK	2,527
6	JP Morgan Chase & Co	USA	2,175
7	Credit Agricole	France	2,174
8	Citigroup	USA	1,938
9	Mitsubishi UFJ Financial Group	Japan	1,922
10	ING Group	Netherlands	1,858

Top Banks in the World by Assets, 2017

Rank	Bank	Country	Total Assets 2017 ($ billions)
1	Industrial & Commercial Bank of China	China	4,006
2	China Construction Bank Corp	China	3,397
3	Agricultural Bank of China	China	3,233
4	Bank of China	China	2,989
5	Mitsubishi UFJ Financial Group	Japan	2,774
6	JP Morgan Chase & Co	USA	2,534
7	HSBC Holdings	UK	2,522
8	BNP Paribas	France	2,348
9	Bank of America	USA	2,281
10	China Development Bank	China	2,202

Consider how the list of the world's ten largest banks changed between 2008 and 2017. Calculate the total combined assets of the world’s top ten largest banks in each year. Then calculate what percentage of these assets were held by banks based in the U.S. and China. Round the percentages to whole numbers.

What were the total combined assets of the world’s ten largest banks in 2008? $________billion.

Of these total combined assets for the ten largest banks in 2008, what percentage was held by U.S. based banks? U.S. banks holdings:________%

Of these total combined assets for the ten largest banks in 2008, what percentage was held by Chinese based banks? Chinese bank holdings:_______%

Please enter a value for the total assets of the world’s ten largest banks in 2017. $_______billion.

Of these total combined assets for the ten largest banks in 2017, what percentage was held by U.S. based banks? U.S. banks' share:_____%

Of these total combined assets for the ten largest banks in 2017, what percentage was held by Chinese based banks? Chinese banks' share:______%

Answer 1

First and foremost the asset size has inched higher, and in 2017 50% of the world's largest banks in top 10 are Chinese whereas in 2008, there was not a single Chinese bank in top 10 according to the total assets size. In 2008, European countries and U.S dominated the list of top banks and only one Asian country's bank from Japan was in the top 10.

The total combined assets of the world's top ten largest banks in 2008 was $24,738 billion. While in 2017 it was $28,286 billion.

Percentage of assets held by banks based in the U.S and China in 2008. (2,175+1,938) / 24,738 = 4,113 / 24,738 = = 17%

Percentage of assets held by banks based in the U.S and China in 2017. (4,006 + 3,397 + 3,233 + 2,989 + 2,534 + 2,281 + 2,202 ) / 28,286 = 73%

2008

The total combined assets of the world's 10 largest banks in 2008 = $24,738 billion

Held by U.S based banks = (2,175+1,938) / 24,738 = 17%

There were no Chinese banks in 2008 in top 10. Thus Chinese bank holdings were 0%

2017

Total assets of the world's ten largest banks in 2017 = Addition of all the total assets = $28,286 billion.

Percentage held by U.S based banks = (2,534 + 2,281 ) / 28,286 = 17%

Percentage held by Chinese based banks = (4,006 + 3,397 + 3,233 + 2,989 + 2,202 ) / 28,286 = 56%

Thus Chinese banks share has increased drastically from 2008 to 2017.