Bob Wilmers, Chairman and CEO of M&T Bank, has played a critical role in Buffalo over the past 20 years as he's grown M&T Bank from a company worth just over $1 billion to the 29th largest bank holding company in America now worth $10.3 billion. Wilmers has never shied away from playing a prominent public role, whether it's advocating for the hiring of Superintendent James Williams or serving as the head of the Empire State Development Corporation.
Today, Wilmers took to Bloomberg.com to pen an op-ed criticizing the biggest banks in the country and the regulatory environment that is facilitating their growth. While it may seem odd that the CEO of the 22nd largest bank in the country is criticizing big banks, Wilmers takes great pains to highlight the differences between regional and community banks (like his) and the six mega-banks.
Wilmers points out that in 1990 (when M&T Bank was worth less than $1 billion), the six largest financial institutions accounted for 9 percent of all US deposits. As of December 31, 2010, the six largest accounted for 36% of deposits. Wilmers goes on to claim that "trading revenue at these institutions distinguishes them from traditional commercial banks, which aren't typically involved in such speculative endeavors. The Big Six institutions earned more than 93 percent of the trading revenue generated by all American banks during the past two years. To say these large institutions are the same species as traditional commercial banks is akin to describing dinosaurs as reptiles -- true but profoundly misleading."
Read the entire Bloomberg piece.
There should be NO deposits in banks, period. They now have a license to steal - paying NOTHING on deposits while charging 20%+ on credit cards, their main business. THis license to steal was paid for via bribes to State & Federal politicians.
Everyone, everywhere, should yank every penny out of every bank & move to credit unions. While the CUs don't pay much more than banks, it would cripple the banks and bring them down. When our economy was healthy, banks paid 4% and loaned at 6%, and lived on that difference. Now they just steal.
I went all in to CU's about 5 years ago, best decision ever.
Are you trying to sound this ignorant on purpose?
Banks pay interest on deposits as a spread to international rates, so it's not the banks setting these ridiculously low rates, it's the world.
And loan rates are also based on this. If you haven't noticed, mortgage, auto, and home equity loan rates are at record lows.
So learn this: when deposit rates are low, so are loan rates, and vice versa.
And yes, credit unions are great to put your deposits in a get a loan, but they also have a very limited scope of products. They're great for some, not for everyone.
Hate on the system, fine, but at least know your sh!t so you don't sound like a fool.
Sounds to me like GreenJeans is still pissed at a fee he was charged ten years ago that his bank wouldn't waive. In response to GJ's nonsensical rant regarding ‘banks’, he might want to check his facts before making the blanket statement that credit cards are a banks’ main business since, for M&T, that business only represents a small portion of their business relative to other offerings (e.g. mortgages). In fact, M&T wasn't even in the credit card business until they offered a new credit card product last year. In regards to the rates charged on cc’s, banks are forced to charge high rates on this product for two reasons: 1) The rewards programs that consumers have grown to love so much cost banks a fortune; and 2) charge-offs on unsecured revolving credit cards are significantly higher than on a product with collateral, for example an auto loan or a mortgage. In fact, even given the ‘high’ rates on credit cards, the product is marginally profitable at best. Note, this is all public information that can be found in any bank’s annual report.
In response to rates paid on deposits, I agree that a number of years ago it may have been reasonable for banks to pay 4% on deposits and charge 6% on loans but the fact of the matter is that we live in a different environment now; rates on loans are low right now, in fact lower than they have ever been (Case in point, my mortgage rate is 3.25% and I didn’t pay any points up front). In addition, government regulations have severely limited the income that banks can earn on fees, which by the way, are absolutely justified. For example, so many people bitch about fees all the while not realizing that when you overdraft on your checking account because you’re a deadbeat it costs banks money.
In summary, great job with your very astute observations MrGreenJeans. Next time why don’t you take a few minutes to put together a coherent response to an article as opposed to flying off the handle like a moron as you do in so many other posts.
As for M&T, I think they’re awesome and Wilmers is the man. You won’t find another CEO of a major bank working to bring to light the major issues in the banking system as hard as he is….