Question

Go to www.federalreserve.gov and click on the tab "Banking Information \& Regulation." Then select the links "Banking Data" followed by "Large Commercial Banks." Once there, choose the latest release of quarterly data. a. Which bank has the largest consolidated assets? b. Which bank has the largest domestic assets? c. What percent of U.S. GDP are the domestic assets of the bank listed in part b? (Hint: You can find U.S. GDP at http://research.stlouisfed.org/fred2/ series/GDP?cid=106 using the links "Gross Domestic Product (GDP)" and then "Current-dollar and 'real' GDP.")

Short answer

Answer: The steps include 1) gathering data on large commercial banks, 2) identifying the largest bank by consolidated assets, 3) identifying the largest bank by domestic assets, 4) gathering data on U.S. GDP, and 5) calculating the percent of U.S. GDP for the largest bank by domestic assets.

Step-by-step solution

Gather data on large commercial banks

Visit the Federal Reserve website (www.federalreserve.gov) and navigate to the "Banking Information & Regulation" tab. Then follow these links: "Banking Data" -> "Large Commercial Banks." Choose the latest release of quarterly data.

Identify the largest bank by consolidated assets

Examine the data provided for large commercial banks. Look for the bank with the largest consolidated assets. This should be found in a column titled "Consolidated Assets".

Identify the largest bank by domestic assets

Similarly, examine the data for large commercial banks and look for the bank with the largest domestic assets. This should be found in a column labeled "Domestic Assets".

Gather data on U.S. GDP

Visit the St. Louis Federal Reserve's FRED website at http://research.stlouisfed.org/fred2/series/GDP?cid=106 to obtain the most recent Gross Domestic Product (GDP) data. Click on the "Gross Domestic Product (GDP)" link and then the "Current-dollar and 'real' GDP" link.

Calculate the percent of U.S. GDP for the largest bank by domestic assets

To calculate the percent of U.S. GDP, take the value of the largest bank's domestic assets and divide it by the U.S. GDP then multiply by 100. For example, if the largest bank's domestic assets are \(3,000,000,000 and the U.S. GDP is \)20,000,000,000,000, then the calculation would be: (\(3,000,000,000 / \)20,000,000,000,000) * 100 = 0.015%

Key concepts

Consolidated Assets

Consolidated assets represent the total assets held by a bank, encompassing both domestic and international operations. These include a wide array of financial instruments like loans, securities, and real estate. When you look at consolidated assets, you are essentially observing the bank's total financial strength across all its branches worldwide.

Understanding consolidated assets is crucial as it provides insight into:

• The overall financial health of a bank.
• How extensive the bank's operations are, both domestically and internationally.
• The bank's ability to manage and allocate resources efficiently across different regions.

In the context of banking data, the Federal Reserve provides a comprehensive look at these figures allowing analysts and stakeholders to assess and compare the size and market influence of large commercial banks.

Domestic Assets

Domestic assets are a subset of a bank's consolidated assets, focusing solely on the financial instruments and resources tied to operations within the bank's home country. These assets include domestic loans, real estate holdings, and domestic securities. They give a clearer picture of how a bank is performing within its national borders.

Why are domestic assets important?

• They provide a detailed view of a bank's market position and influence within its home economy.
• Considering domestic assets helps regulators and investors understand a bank's impact on national economic stability.
• They are used to compare banks' engagement in and support of the domestic economy.

By examining domestic assets, one can gauge how heavily a bank is involved in the growth and development of its national market.

U.S. GDP

The U.S. Gross Domestic Product (GDP) is a crucial economic indicator that measures the total value of goods and services produced within the United States over a specified period, typically quarterly or annually. It reflects the country's economic health and is used to compare the size of different economies internationally.

Key aspects of U.S. GDP include:

• Monitoring economic growth and forecasting economic development trends.
• Serving as a benchmark for comparing the productivity levels of different nations.
• Providing a snapshot of economic activity, helping policymakers in decision-making.

Understanding how a bank's domestic assets relate to the U.S. GDP is significant because it allows us to see the bank's magnitude relative to the entire U.S. economy. Calculating the percentage of domestic assets against U.S. GDP, for instance, offers insights into how much a single bank contributes to or impacts the national economy.