Estimated reading time: 2 minutes
By: Ken Chase
It seems like only yesterday that the U.S. banking industry was reeling from the aftermath of a financial crisis that saw them receive billions of dollars in bailout funds to prevent an industry-wide collapse. Now, more than a decade later, the six largest banks in the United States have just finished a ten-year run of success that netted them a combined one trillion dollars in profits.
Those six banking giants include Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo, according to Bloomberg. The news outlet also suggests that those six companies are well-positioned to increase their profitability in 2023.
According to analysts, the banks’ streak of sound profits is the result of a unique combination of factors over the last ten years. Wall street trading volatility, an increase in dealmaking, and the major tax cuts initiated during the previous presidential administration all helped to contribute to the boom.
What made the run all the more impressive is that it occurred during a time in which large segments of the public were still angry over the near collapse of the financial industry. At the same time, Congress had increased oversight, initiated new rules to rein in banking excesses, and the global economy was rocked by instability and a once-in-a-century pandemic.
It was also a decade that saw many of those banks pay enormous fines and settlements to address scandals and other wrongdoing. Financial news reports regularly featured stories about fraudulent mortgage practices, irregular sales and account activities, and other questionable or outright illegal acts that cost those large banks billions of dollars in settlements with regulators.
