Banking in the USA is a large and complex industry facing rapid change in both market forces and regulatory environments. In the USA a bank is a financial institution which accepts demand deposits from the public, provides a payment settlement system based on demand deposit accounts and makes commercial loans to business units. However, banks are just one type of financial intermediary; others include other depository institutions, insurance companies, investment companies, pension funds, finance companies and securities companies. Recently, the banks’ share of the financial market has been declining. Two major regulatory constraints, interest rate ceilings on deposits and bank capital requirements, are tending to make banks less competitive in asset-based activities. However, commercial banks have increasingly moved into off-balance sheet activities which has helped to halt the decline.

Depending on their classification, banks are regulated through either the Office of the Comptroller of the Currency, the Federal Reserve System or the Federal Deposit Insurance Corporation. Regulators comply with the Basle Accord on capital adequacy and have procedures for taking corrective action and dealing with bank failure. There has been a considerable weight of banking legislation in the USA in the twentieth century, with eleven major statutes devoted to banking regulation from 1913–94.

Taeho Kim