One of the key financial institutions are banks, which provide fundamental financial functions such as lending, depositing, and investing. A strong and stable banking system is important so that their functions help, among other things, financing enterprises, which in turn drives economic growth and positively impacts employment. The financial crisis in 2008 proved that a weak banking system can provoke a global economic crisis.
The next global economic crisis came in 2020 caused by the coronavirus pandemic. The central banks are especially important financial institutions in times of crisis to help stabilize the economy. After the coronavirus outbreak, central banks all over the world provided quantitative easing measures to help stimulate the economy and to help banks function the way they should.
The market capitalization of the largest global banks took a hit during 2020 because of the global economic crisis caused by the coronavirus pandemic. Some of the world’s largest banks saw market cap values drop by more than a third, and some almost by half, throughout the year. The total aggregated market cap dropped significantly during the first quarter of 2020 and recovered slightly throughout the year, but with values far from the ones recorded in 2019.
Leading bank worldwide by market capitalizationAsset management companies is another key component of financial institutions. These companies manage funds for individuals and companies. The world’s leading asset managers are dominated by U.S. firms, more specifically, eight of the ten largest asset management companies in the world are based in the United States, the biggest one being BlackRock.
Total assets under management of BlackRock IncWith the rising trend of online banking, established retail banks are since a few years back being challenged by online banks. The banks exist purely in digital form, and customers may prefer it to a traditional bank due to its easy access through the app, their personalization features, and their low fees. The British unicorn Revolut was the largest venture capital-backed online bank in Europe as of 2020.
Mobile banking in the U.S.The world’s largest bank is the Chinese bank Industrial and Commercial Bank of China (ICBC). The state-owned commercial bank had total assets reaching around 4.3 trillion U.S. dollars in 2019. The three following largest banks in the world are also headquartered in China, China Construction Bank Corporation, Agricultural Bank of China, and Bank of China.
Banking Industry in ChinaWealth managers serves high net worth individuals (HNWI), whose investible wealth exceeds one million U.S. dollars, with managing their assets and optimizing their investment portfolios. Their investible wealth might refer to property, land, stocks, and bonds etc. The largest wealth manager in the world in 2020 was Bank of America’s Global Wealth and Investment division, with around 1.35 trillion U.S. dollars in assets under management.
Private Wealth ManagementThe category Financial Institutions presents statistics and reports on establishments that provide financial services. These establishments include central banks, retail and commercial banks, online banks, investment institutions, and asset management companies, among others.
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