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De-Dollarization: Countries Seeking Alternatives to the U.S. Dollar



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De-Dollarization: More Countries Seek Alternatives to the U.S. Dollar

De-Dollarization: Countries Seeking Alternatives to U.S. Dollar

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The U.S. dollar has dominated global trade and capital flows over many decades.

However, many nations are looking for alternatives to the greenback to reduce their dependence on the United States.

This graphic catalogs the rise of the U.S. dollar as the dominant international reserve currency, and the recent efforts by various nations to de-dollarize and reduce their dependence on the U.S. financial system.

The Dollar Dominance

The United States became, almost overnight, the leading financial power after World War I. The country entered the war only in 1917 and emerged far stronger than its European counterparts.

As a result, the dollar began to displace the pound sterling as the international reserve currency and the U.S. also became a significant recipient of wartime gold inflows.

The dollar then gained a greater role in 1944, when 44 countries signed the Bretton Woods Agreement, creating a collective international currency exchange regime pegged to the U.S. dollar which was, in turn, pegged to the price of gold.

By the late 1960s, European and Japanese exports became more competitive with U.S. exports. There was a large supply of dollars around the world, making it difficult to back dollars with gold. President Nixon ceased the direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.

Although it has remained the international reserve currency, the U.S. dollar has increasingly lost its purchasing power since then.

Russia and China’s Steps Towards De-Dollarization

Concerned about America’s dominance over the global financial system and the country’s ability to ‘weaponize’ it, other nations have been testing alternatives to reduce the dollar’s hegemony.

As the United States and other Western nations imposed economic sanctions against Russia in response to its invasion of Ukraine, Moscow and the Chinese government have been teaming up to reduce reliance on the dollar and to establish cooperation between their financial systems.

Since the invasion in 2022, the ruble-yuan trade has increased eighty-fold. Russia and Iran are also working together to launch a cryptocurrency backed by gold, according to Russian news agency Vedmosti.

In addition, central banks (especially Russia’s and China’s) have bought gold at the fastest pace since 1967 as countries move to diversify their reserves away from the dollar.

How Other Countries are Reducing Dollar Dependence

De-dollarization it’s a theme in other parts of the world:

  • In recent months, Brazil and Argentina have discussed the creation of a common currency for the two largest economies in South America.
  • In a conference in Singapore in January, multiple former Southeast Asian officials spoke about de-dollarization efforts underway.
  • The UAE and India are in talks to use rupees to trade non-oil commodities in a shift away from the dollar, according to Reuters.
  • For the first time in 48 years, Saudi Arabia said that the oil-rich nation is open to trading in currencies besides the U.S. dollar.

Despite these movements, few expect to see the end of the dollar’s global sovereign status anytime soon. Currently, central banks still hold about 60% of their foreign exchange reserves in dollars.

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Visualized: The 100 Largest U.S. Banks by Consolidated Assets

In this visual we showcase the relative size of the 100 largest U.S. banks in terms of consolidated assets.



largest us banks

The 100 Largest U.S. Banks by Consolidated Assets

The largest 100 banks in the U.S. hold a combined $18.8 trillion in consolidated assets, but recent collapses of medium-sized banks like Silicon Valley Bank and First Republic have caused worries throughout the banking world.

This visual using data from the Federal Reserve ranks the country’s 100 largest banks by the size of their consolidated assets.

ℹ️ Consolidated assets refers to the sum of all of the bank’s assets. As well as liquid cash, this includes non-liquid assets like stocks, bonds, property, and the subtraction of its liabilities.

The Top 100 Banks

America’s biggest bank is JP Morgan Chase with over $3.3 trillion in assets, with Bank of America trailing behind in second place with $2.5 trillion. Here’s a closer look at the numbers:

RankBank / Holding Co NameConsolidated Assets ($ Millions)
#1JP Morgan Chase Bank$3,267,963
#2Bank of America$2,518,290
#4Wells Fargo$1,687,507
#5US Bancorp$590,460
#6Truist Bank$564,837
#7PNC Bank$556,314
#8Goldman Sachs$490,799
#9Capital One$469,432
#10TD Bank$401,245
#11Bank of NY Mellon$341,455
#12State Street$287,069
#13BMO Harris Bank$265,446
#14First Republic$232,944
#15Citizens Bank$221,955
#16First Citizens Bank$214,599
#17Fifth Third Bank$207,586
#18Morgan Stanely$205,845
#19Manufacturers and Traders Bank$202,363
#20Morgan Stanley Private Bank$195,667
#22Huntington National Bank$188,441
#23Ally Bank$186,383
#24American Express$165,450
#25HSBC Bank USA$164,492
#26Regions Bank$153,125
#27Northern Trust$150,573
#28Discover Bank$130,703
#29Flagstar Bank$123,633
#30Santander Bank$105,314
#31MUFG Union Bank$99,964
#32City National Bank$96,370
#33Comerica Bank$91,259
#34Zions Bank$88,574
#35First Horizon Bank$80,465
#36Webster Bank$74,793
#37Western Alliance Bank$70,986
#38East West Bank$67,219
#39Valley National Bank$64,314
#40Synovus Bank$61,726
#41Umqua Bank$53,986
#43Cadence Bank$51,693
#44Frost Bank$51,286
#45Old National Bank$47,554
#46BOK Financial$45,269
#47Pinnacle Bank$44,988
#48Southstate Bank$44,903
#49Pacific Western Bank$44,255
#50First National Bank of Pennsylvania$44,132
#51Raymond James Bank$43,359
#52Associated Bank$40,653
#53UMB Bank$40,354
#54Prosperity Bank$37,829
#55Hancock Whitney Bank$37,525
#56Barclays Bank$37,352
#57United Bank$37,095
#58TD Bank$36,460
#59Deutsche Bank$36,103
#60BNY Mellon$31,945
#61Commerce Bank$31,853
#62First Interest Bank$31,565
#63United Bank$30,108
#64Bank OZK$28,971
#66Texas Capital $28,592
#67First National Bank of Omaha$28,393
#68Glacier Bank$27,785
#69Simmons Bank$27,538
#70Fulton Bank$26,996
#71Arvest Bank$26,946
#72City National Bank of Florida$26,204
#73Ameris Bank$25,991
#74United Community Bank$25,815
#75First Hawaiian Bank$24,883
#76Bank of Hawaii$23,904
#77Eastern Bank$22,702
#78Centennial Bank$22,452
#79Washington Federal Bank$22,320
#80Cathay Bank$22,016
#81Customers Bank$21,768
#82Pacific Premier Bank$21,362
#83Stifel Banking and Lending$20,969
#84Bank of Hope$20,564
#85Atlantic Union Bank$19,990
#86Rockland Trust$19,445
#87Trustmark National Bank$18,875
#88Central Bancompany$18,850
#89DBA Independent Financial$18,793
#90First Merchants Bank$18,165
#91Mechanics Bank$17,946
#92Renasant Bank$17,479
#94Tristate Capital Bank$17,050
#95First Financial Bank$16,857
#97Bank of America$16,550
#98Wells Fargo$16,473
#99Citizens Bank$16,271
#100Bremer Bank$15,763

The first and second place banks combined account for around 30% of the consolidated assets on this list. On the flip side, the smallest bank is Bremer Bank at $15.8 billion in consolidated assets. While this seems small in the context of this list, there are actually thousands of even smaller commercial financial institutions in the country.

Many banks have seen significant changes to their ranking since the last Fed data at the end of 2022. BMO Harris moved up 10 spots, going from $177 billion in consolidated assets to $265 billion—an increase of 50%. In February, the bank acquired the San Francisco-based Bank of the West (which previously ranked 34th on this list).

First Citizens also saw its rank improve, going from 30th to 16th, thanks to the acquisition of the remnants of Silicon Valley Bank.

In May 2023, a planned merger between First Horizon and TD Bank was mutually terminated. The merger, had it gone ahead, would have seen TD Bank surpass the size of Capital One.

Banking Heavyweights

Typically, big banks are less of a risk for borrowers in terms of their liquidity, holding huge sums in diversified assets, whereas smaller and more regional American banks have a narrower margin for error. However, many other factors beyond size play into risk, like an institution’s loan portfolio or management style.

Volatility in the banking sector is expected to have implications on the wider economy. For example, bank lending capacity is expected to decrease by 1% this year, a shift which the IMF expects will take almost half a percentage point off the U.S.’ overall GDP.

The largest banks have set aside billions in anticipation of bad loans as a result of pressure from rising interest rates. JP Morgan Chase currently has $2.3 billion in provisions/reserves built. Here’s a look at some of the current reserves that banks have set aside based on most recent data:

BankReserves Built / Reserves ReleasedAs of
JP Morgan Chase$2.3 billionQ1 2023
Wells Fargo$1.2 billionQ1 2023
Goldman Sachs$972 millionQ4 2022
Citigroup$241 millionQ1 2023
Morgan Stanley$234 millionQ1 2023
Bank of America$124 millionQ1 2023

Bank Volatility

Small and medium sized banks (<$250 billion in assets) play an important role in the economy. Collectively, these banks are responsible for 45% of consumer lending and 80% of commercial real estate lending.

However, lending by these banks has been tightening up, given the current economic conditions and fears around bank collapses.

Overall, continued turmoil in the banking sector would likely reduce profitability for banks and ultimately slow economic growth.

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