The trend comes amid the continued clamor for Wall Street banks either to shrink or break up altogether. Recent shareholder votes show little internal appetite for breakups, but pressure from Washington is likely to continue as the populist drumbeat intensifies.
"It's public policy. The public policy is working," bank analyst Dick Bove, vice president of equity research at Rafferty Capital Markets, said in an interview. "The U.S. banks are shrinking while the Chinese, the French have no such desire. The net effect is you get a shift in global financial power. It goes away from those countries which are shrinking in size and is picked up by those countries which are expanding in size."
Bove has found himself as one of the few fighting against the strong political wind to downsize the too-big-to-fail institutions.
"If you keep trying to shrink the biggest banks in your system, you're going to reduce lending, you're going to reduce the money supply and you're going to harm the economy," he said. "It's definitely supported by every element in society. The Congress, the president, the regulators, the public, the press — everybody believes that smaller banks are better for the United States. They just haven't thought through the issue."