Complexity in Large U.S. Banks

The structural complexity of the largest U.S. bank holding companies (BHCs) has been changing. Following the global financial crisis, the simplification of bank complexity was a policy priority. Using a variety of measures of organizational, business, and geographic complexity, the authors show that large U.S. BHCs nonetheless remain very complex. Organizational complexity has declined, as the average number of legal entities within large U.S. BHCs has fallen. By contrast, the range of industries spanned by legal entities within the BHCs has shifted more than it has declined, especially within the financial sector; nonfinancial entities within U.S. BHCs still tilt heavily toward real estate–related businesses and span numerous other industries. Fewer large BHCs have global affiliates and the geographic span of the most complex has decreased. Locations with favorable tax treatment still attract a significant share of foreign bank and nonbank entities while informationally opaque locations are losing their share of such entities