Today it is no longer necessary to prove that the notorious US hegemony is based on the monopoly of the Federal Reserve printing press (FRS). It is also more or less clear that the shareholders of the Fed are banks of world caliber. They include not only US banks (Wall Street banks), but also European banks in Europe (banks of the City of London and some countries of continental Europe).
During the global financial crisis 2007-2009. The Fed, acting without publicity, distributed to various banks loans (almost interest-free) in excess of 16 trillion. dollars. The owners of money handed out loans to themselves, that is, to those banks, which are the main shareholders of the Federal Reserve. At the beginning of this decade, under heavy pressure from the US Congress, a partial audit of the Fed was conducted, and in the summer of 2011, its results were made public. The list of loan recipients is a list of the main shareholders of the Fed. Here they are (in parentheses are the amount of received Fed loans in billions of dollars): Citigroup (2500); Morgan Staley (2004); Merril Lynch (1949); Bank of America (1344); Barclays PLC (868); Bear Sterns (853); Goldman Sachs (814); Royal Bank of Scotland (541); JP Morgan (391); Deutsche Bank (354); Credit Swiss (262); UBS (287); Leman Brothers (183); Bank of Scotland (181); BNP Paribas (175). It is noteworthy that a number of recipients of FRS loans are not American but foreign banks: British (Barclays PLC, Royal Bank of Scotland, Bank of Scotland); Swiss (Credit Swiss, UBS); German Deutsche Bank; French BNP Paribas. These banks have received from the Federal Reserve about 2,5 trillion dollars. We will not be mistaken if we assume that these are foreign shareholders of the Fed.
However, if the composition of the main shareholders of the Fed is more or less clear, then this cannot be said of the shareholders of those banks that, in fact, own the Fed's printing press. Who are the shareholders of the Federal Reserve shareholders?
First of all, consider the leading US banks. Today, the core of the US banking system is represented by six banks. The Big Six includes Bank of America, JP Morgan Chase, Morgan Stanley, Goldman Sachs, Wells Fargo, Citigroup. They occupy the first lines of American banking ratings on such indicators as the amount of capital, controlled assets, attracted deposits, capitalization, profit. If banks are ranked by assets, then JP Morgan Chase comes first (2.075 billion dollars at the end of 2014). In terms of capitalization, Wells Fargo ranks first ($ 261,7 billion in the fall of 2014). By the way, according to this indicator, Wells Fargo came out on top not only in America, but also in the world (although it ranks fourth in US assets, and in the world it is not even among the top twenty).
On the official websites of these banks there is some information about the shareholders. The bulk of the capital of the “big hair” of American banks is in the hands of the so-called institutional shareholders - various financial companies. Among them there are banks, that is, there is a cross-participation in capital.
The number of institutional investors at the beginning of 2015 in individual banks was as follows: Bank of America - 1410; JP Morgan Chase - 1795; Morgan Stanley - 826; Goldman Sachs - 1018; Wells Fargo - 1729; Citigroup - 1247. In each of these banks, a group of large investors (shareholders) is quite clearly distinguished. These are the investors (shareholders) who have more than 1 percent of capital each. Such shareholders are, as a rule, from 10 to 20. It is striking that in all banks in the group of large investors appear the same companies and organizations. In tab. 1 give a list of such the largest institutional investors (shareholders).
The largest institutional shareholders of US banks and their share in the share capital of individual banks (%, December 31 2014)
Leading institutional shareholders
Major US banks
Bank of America
State Street Corporation
JP Morgan Chase
In addition to the institutional investors indicated in the table, the lists of shareholders of leading American banks include the following organizations: Capital World Investors, Massachusetts Financial Services, Price (T. Rowe) Associates Inc., Mitsubishi UFJ Financial Group, Inc., Berkshire Hathaway Inc., Dodge & Cox Inc., Invesco Ltd., Franklin Resources, Inc., Bank of New York Mellon Corporation and some others. I name only those that appear as shareholders in at least two of the six leading US banks.
The institutional shareholders that appear in the financial statements of leading American banks are various financial companies and banks. Separate accounting records are kept for such shareholders as individuals and mutual funds. In a whole number of Wall Street banks, a significant proportion of shares belongs to the employees of these banks. Of course, these are not ordinary employees, but leading managers (however, ordinary bank employees may have some symbolic number of shares). As for mutual funds (1), many of them are under the influence of all the same institutional shareholders, which are named above.
As an example, a list of the largest shareholders of the American bank Goldman Sachs, belonging to the category of mutual funds (table 2).
Goldman Sachs largest mutual fund shareholders (as of 31 December 2014 of the year)
Mutual fund name
Dodge & Cox Stock Fund
Vanguard Total Stock Market Index Fund
SPDR Dow Jones Industrial Average ETF
Vanguard 500 Index Fund
Vanguard Institutional Index Fund-Institutional Index Fund
SPDR S&P 500 ETF Trust
Growth Fund Of America Inc
MFS Series Trust I-MFS Value Fund
Select Sector SPDR Fund-Financial
Fundamental Investors Inc
At least three of the funds listed in the 2 table are under the influence of the Vanguard Group financial corporation. This is the Vanguard 500 Index Fund, the Vanguard Institutional Index Fund. The share of Vanguard Group in the share capital of Goldman Sachs is 4,90%. And three mutual funds, which are in the system of this financial holding, give an additional 3,59%. Thus, in fact, the positions of the Vanguard Group in the Goldman Sachs bank are determined not by 4,90%, but by 8,49%.
In a number of Wall Street banks there is a category of individual shareholders - individuals. As a rule, these are top managers of a given bank, both acting and retired. We give a certificate of individual shareholders of the bank Goldman Sachs (tab. 3).
Goldman Sachs largest individual shareholders (as of 27 February 2015 of the year)
Number of shares
BLANKFEIN LLOYD C
WEINBERG JOHN S
PALM GREGORY K
VINIAR DAVID A
In the aggregate listed in the table. 3 five individuals own more than 5,5 million shares of Goldman Sachs, which represents approximately 1,3% of the total share capital of the bank. This is as much as a share in an institutional shareholder like the Northern Trust. Who are these people? Goldman Sachs top managers. Lloyd Blankfein, for example, is Chairman of the Board of Directors and Chief Executive Officer of Goldman Sachs from 31 May 2006. John Weinberg - Vice-President of Goldman Sachs from the same time, simultaneously a member of the management committee and co-chairman of the investment banking unit (he left his last post in December 2014 of the year). Three other individual shareholders are also classified as Goldman Sachs top managers, all of whom are active employees of the bank.
Is a few percent equity interest in order to effectively manage a bank? There should be at least three points.
Firstly, there are no very large shareholders in the leading US banks for a long time. Formally, these banks do not have a single shareholder whose share would be higher than 10%. The total number of institutional shareholders (investors) in US banks ranges from one thousand. It turns out that on average an institutional shareholder accounts for approximately 0,1 percent of capital. In fact, it is less, because besides them there are mutual funds (taken into account separately), as well as many thousands of individuals. In a number of banks, employees own shares. In the case of Goldman Sachs, in the hands of individuals is about 7% share capital. Finally, part of the shares are in free circulation on the stock market. Taking into account the dispersion of the share capital among tens of thousands of holders of securities, the ownership of even 1 by the percentage of the shares of Wall Street Bank is a very powerful position.
Secondly, the same owner can be behind several (or many) formally independent shareholders - the ultimate beneficiary. For example, the owners of the financial holding Vanguard Group participate in the capital of the bank Goldman Sachs and directly, and through mutual funds, which are in the sphere of influence of the specified holding. Most likely, the share of Vanguard Group in the capital of Goldman Sachs is not 4,90% (the share of the parent company) and not 8,49% (the share with the three controlled mutual funds), but more. It is impossible to dismiss from the accounts and shareholders - individuals, whose share is much higher than their share in the share capital, since these are top managers appointed to senior positions by those who are called "ultimate beneficiaries".
Thirdly, there are such shareholders whose influence on the bank’s policy exceeds their share in the share capital because they own so-called voting shares. At the same time, other shareholders own so-called preferred shares. The latter give their owners the privilege of receiving a fixed dividend, but at the same time deprive their owner of the right to vote at shareholders' meetings. Let's say a shareholder may have a stake in the bank's capital equal to 5%, but his share in the total number of votes may be 10, 20 or even 50%. And the privilege of a decisive vote for Wall Street banks can be much more important than the privilege of obtaining a guaranteed income.
Let's return to tab. 1 in the first part of the article. It shows that in almost all US banks, the main shareholders are financial holdings. At the same time, if the names of the leading banks of Wall Street are known to everyone today, then the names of financial holdings owning large blocks of shares of these banks speak of something only to a very narrow circle of financiers. But we are talking about those who ultimately control the US banking system and the Federal Reserve System. For example, recently the Franklin Templeton Investments investment fund was quite often mentioned, which bought up debt securities of Ukraine on 7-8 billion dollars and actively participates in the economic strangulation of this country. Meanwhile, this fund is a subsidiary of the financial holding company Franklin Resources Inc., which is a shareholder of Citigroup (share 1,24%) and Morgan Stanley (1,40%).
Financial holdings such as Vanguard Group, State Street Corporation, FMR (Fidelity), Black Rock, Northern Trust, Capital World Investors, Massachusetts Financial Services, Price (T. Rowe) Associates Inc., Dodge & Cox Inc .; Invesco Ltd., Franklin Resources, Inc., AXA, Capital Group Companies, Pacific Investment Management Co. (PIMCO) and several others do not just participate in the capital of American banks, but also own mainly voting shares. It is these financial companies that exercise real control over the US banking system.
Some analysts believe that the equity core of Wall Street banks is only four financial companies. Other companies-shareholders either do not belong to the category of key shareholders, or directly or through a chain of intermediaries are controlled by the same “big four”. In tab. 4 provides a summary of the major shareholders of leading US banks.
Leading institutional shareholders of major US banks
Name of the company - shareholder
Controlled assets, valuation (trillion. Dollars; in brackets - the date of valuation)
The number of employees
3,00 (Autumn 2014)
State Street Corporation
2,35 (middle of 2013)
4,90 (April 2014)
4,57 (end of 2013)
Estimates of the value of assets held by financial companies that are shareholders of major US banks are fairly conditional and are periodically reviewed. In some cases, the estimates include only the own assets of the companies, in other cases they also include the assets transferred to companies in trust management. In any case, the value of the assets they control is impressive. In the autumn of 2013, the list of world banks ranked by assets ranked first in the Chinese Industrial and Commercial Bank of China (ICBC) with 3,1 trillion assets. dollars Maximum assets in the US banking system at that time had Bank of America (2,1 trillion dollars). It was followed by such American banks as Citigroup (1,9 trillion. Dollars) and Wells Fargo (1,5 trillion. Dollars).
It is noteworthy that trillion-dollar assets financial holdings of the "big four" turn when using a fairly modest number of employees. With total assets of approximately 15 trillion. dollars, the staff of the "big four" does not reach 100 thousand people. For comparison: the number of employees only in Citigroup Bank is about 250 thousand people, in Wells Fargo - 280 thousand people. Compared to the “big four” financial holdings, Wall Street banks look like workhorses.
In terms of controlled assets, the Big Four financial companies are in a heavier weight category than the US Big-6 banks. The Big Four financial holdings extend their tentacles not only to the US banking system, but also to companies in other sectors of the US and foreign economies. Here you can recall the study of specialists of the Swiss Institute of Technology (Zurich), whose goal was to identify the governing core of the global economic and financial system. In 2011, the Swiss were ranked as the core of global finance by 1218 companies and banks as of the beginning of the financial crisis (2007 year). Inside this conglomerate, an even denser core of 147 companies was discovered. According to the authors of the study, this small core controlled 40% of all corporate assets in the world. Kernel companies were ranked by Swiss researchers. Let's reproduce the first ten of this rating:
1. Barclays plc
2. Capital Group Companies Inc
3. FMR Corporation
5. State Street Corporation
6. JP Morgan Chase & Co
7. Legal & General Group plc
8. Vanguard Group Inc
9. UBS AG
10. Merrill Lynch & Co Inc.
An important fact: all 10 lines of the Swiss list are occupied by organizations of the financial sector. Four of them are banks, the names of which are on everyone's lips (one of them - Merrill Lynch - no longer exists). Of particular note is the American bank JP Morgan Chase & Co. It is not just a bank, but a bank holding company participating in the capital of many other American banks. As you can see from the table. 1, JP Morgan Chase has a stake in all other Big Six banks with the exception of Goldman Sachs. There is another notable bank in the US banking world, which is not formally included in the "big six", but which invisibly controls some of the banks of the "big six". We are talking about The Bank of New York Mellon Corporation. The specified bank held shares in Citigroup (1,24% stake), JP Morgan Chase (1,48%), Bank of America (1,25%).
But the six lines of the Swiss list belong to financial companies, rarely appearing in the open press. These are financial holdings that specialize in acquiring shares of companies in various sectors of the economy throughout the world. Many of them establish various investment, including mutual funds, manage clients' assets on the basis of trust agreements, etc. In this list we see three financial companies from the “big four”, shown in Table. 4: Vanguard Group Inc, FMR Corporation (Fidelity) and State Street Corporation. These financial holdings, as well as the Black Rock company (which has greatly strengthened its position since 2007), form the core of the US banking system.
It is noteworthy that the “big four” is very well represented in the JP Morgan Chase banking holding: Vanguard Group - 5,46%; State Street Corporation - 4,71%; FMR Corporation (Fidelity) - 3,48%; Black Rock - 2,75%. Another of the above-mentioned bank holdings - The Bank of New York Mellon Corporation - is controlled by three financial companies of the “big four”: Vanguard Group - 5,15%; State Street Corporation - 4,72%; FMR Corporation (Fidelity) Black Rock - 2,62%.
After we have identified the governing core of the US banking system, consisting of a small number of financial holdings, a number of new questions arise. Who are the owners and final beneficiaries of these financial holdings? How far does the influence of these financial holdings extend in industry and geography? Is it possible to assert that the approach to explaining what is happening in the field of global finance based on the concept of the “struggle of the Rothschilds and Rockefellers clans” is outdated?
However, this is a topic for another conversation.