The Analysis Of American Banking Industry Based On SCP

Since the establishment of the First Bank of America in Philadelphia in1791,the banking industry of the United States has made remarkable achievements. Along with all the previous reform of the financial markets, the U.S. banking industry has achieved effective exploration and innovation in theoretical and practical aspects. As of now, the style of U.S. banking industry has transferred from strict supervision, spanned restrictions, separate operation to policy deregulation, free competition, trans-regional and mixed operation. Stringent controls of the U.S. banking industry have intensified competition in the field. In order to obtain proper profit, banks had to try a new business pattern but with high-risk. However, then, with the banking deregulation, banks has been put into an excessive slack, which indeed improves bank efficiency and performance, but also encourages extreme aggressive in the business to obtain a higher excess profits. Needless to say, by previous reforms in the U.S. banking industry, tremendous development has taken place, however, at the same time, some huge risk has been accumulated and the previous banking crisis have seen that. Even so, however, in the ups and downs of U.S. banking industry more than200years, there is one bank that can be able to always adhere to its’business concept, and adjust its strategic choice following the market changes constantly regardless of changes of the market environment, eventually has developed into the nation’s best and most robust retail bank. On asset ranking in2011, it has ranked fourth in the nation. This bank is Wells Fargo.Banking industrial organization theory considers that on the one hand, the banking market structure can affect the bank’s market behavior to some extent, thereby affecting the market performance of the banking sector; however, on the other hand, the banking market behavior and market performance will affect the market structure in turn, thereby affecting the industrial organization of the banking industry. Therefore, the U.S. banking industry depends largely on the development and changes of the continuous development of the banking industry organization. Through the introduction of the literature in the banking industrial organization, this paper will elaborate the market structure of the U.S. banking industry which Wells Fargo has faced, the market behavior Wells Fargo has adopted and the market performance that Wells Fargo has achieved. In addition, this article will present the structure of the Chinese banking market and the market behavior of the major financial institutions. Through learning successful experience of the Wells Fargo Bank in the United States, the paper will put forward some practical reference and policy recommendations for the Chinese banking industry.