p The transition from free competition to domination by finance capital likewise signified the conversion of the banks, once a host of "modest middlemen", into a handful of credit monopolists. Today, the concentration of capital in the credit sphere is very much higher than that in the other sectors of the economy. In 1985, the assets of the 100 major US commercial banks totalled $1,751 billion, which was more than the total for 500 major industrial corporations. The major bank today is a truly mammoth enterprise, no longer handling mere millions, but tens and even hundreds of billions of dollars. In the mid-1950s, there was only one bank in the capitalist world with assets topping $10 billion (Bank of America); in 1985, 42 US banks and over 100 banks in other countries had over $17 billion assets.

p The centralisation of capital tends to accelerate the rise of the major banks, almost all of which have actively participated in mergers in the postwar period, with takeovers involving some very solid banks.

p In most of the West European countries and Japan, the bulk of the banking resources is concentrated at a few major banks: in Britain, four major banks have about 75 per cent of the bank deposits; in Belgium, three major banks have over 90 per cent of all the bank deposits; and in Japan, six major banks have roughly 65 per cent of all the commercial bank deposits. It is noteworthy that over the past several decades, the giant banks of Western Europe and Japan have been expanding their operations even faster than the large US banks.

p With the growing financial market of the major banks, the monopoly competition between them has sharpened. Besides, since the beginning of the 20th century, the commercial banks have had to face serious rivalry from specialised credit and financial institutions (insurance companies, savings-banks, unit trusts, and so on), which managed to strengthen their positions substantially in the early postwar decades at the expense of the banking firms. The share of insurance institutions in the aggregate assets of the credit system in the developed capitalist countries increased from 10.8 per cent in the 1881-1900 period to 22.8 per cent in the 1949-1963 period, 77 while the share of the commercial banks dropped from 42.2 per cent to 28.8 per cent.  [77•1  But in the course of the 1970s, the banking monopolies in some developed capitalist countries managed not only to stem the active drive by their rivals but also to counterattack in a situation of much greater economic instability and feverish fluctuations in the demand for borrowed funds and in interest rates. These processes were most pronounced in countries where the banking system developed with direct support from the state (Italy and France). In the United States, the long decline in the share of the commercial banks in the aggregate assets of the credit system was halted in the second half of the 1960s and led to some strengthening of their positions.

p In the course of this rivalry, there is a growing trend for the commercial banks to “universalise” their operations. A century and a half ago, when the banks acted as modest middlemen, they were often called "money shops". The major banks have now developed into giant complexes with "credit and financial supermarkets" at their core, offering their clients from 100 to 200 types of services. Thus, the major West German banks offer short-term and long-term credit; they accept and discount commercial paper; issue and sell securities; and handle trusteeship operations. They have developed into major settlement centres in the FRG economy, what with their current account operations and the provision of ever wider accounting and other services for industrial firms and relatively small credit institutions. They engage in computing and collecting taxes, carry depreciation accounts and handle accounting and settlement operations for their clients.

p The large banks have intruded ever more actively in providing credit for the population. They have ever more numerous opportunities for increasing the financial exploitation and destabilising the material condition of the working people with the rapid growth of consumer and mortgage debt, and the spread of banking operations involving “retail” services for consumers. With an ever larger share of current incomes necessarily going into the payment of fixed debt obligations, the decline in incomes has an especially painful effect on the condition of many workers and employees.

p The following factor has an especial role to play: commercial banks are entitled to issue instruments of payment—cheques. In the United States, the FRG and some other capitalist countries, firms remit their payroll funds directly to bank deposit accounts. A large part of the population uses cheques to expend any considerable sum of money, so that all the basic settlement operations of the population are recorded on bank accounts.

p Some fairy-tale magicians had the power, we are told, to peer from a rooftop down the chimney and to say just what every townsman had cooking in his pot. This kind of power now no longer seems to be so fantastic: the major banks obtain the most detailed information about the size and structure of most family 78 budgets, for they annually process tens of billions of cheques and other payment instruments made out in the purchase of goods by means of credit cards (in the early 1980s almost 35 billion cheques were made out in the United States every year). Ever greater potentialities are also being opened up for finance capital, since full information about a client’s financial operations is the first step for the banks in increasing their sphere of influence and control.

p The new role of the banks necessarily implies that consultative and information services (especially in relations with business) have an ever greater role to play alongside the traditional credit operations. Powerful banks have staffs of technical experts, and bank specialists are directly involved in selecting the most important investment projects of industrial and commercial firms, in restructuring their organisation and modernising their production facilities, introducing new forms of marketing and conducting their financial affairs.

p In order to provide such services, the major banks have made ever wider use of their powerful computing centres. Automatic cash-dispensing machines, which are installed not only on the premises of the credit institutions, but also at airports, bus stops, supermarkets, etc., have recently begun to play an especially important role in the electronic automation of “retail” banking operations. There has been a rapid growth in the number of automated clearing chambers where accounts are settled without any cash transfer. By the end of the century, some 95-96 per cent of all payments in the United States are expected to be made by means of computer transfers, bank cheques, credit and debit cards, and automatic remittances by credit institutions on client orders. It is naturally the major banks at which all these flows of cash-free transfers and "electronic money" are focussed.

p As a result, the giant banks are being gradually converted into centres at which the key economic information is concentrated and processed. When Lenin exposed the techniques by means of which finance capital established its domination, he remarked that Credit Lyonnais, one of the three major French banks, had a special "department for the collection of financial information". Today, this bank collects such information not only in that department, but also makes active use for the purpose of several subsidiaries specialising in business consultations, information services, financial accounting, etc. At the beginning of the century, the financial information department had a staff of about 50, and today one of its consulting subsidiaries alone employs more than 600 people.

p The web of dependence which finance capital weaves round the most diverse spheres of economic activity is getting thicker. Statistical studies indicate that the higher level of banking capital concentration in the money markets inevitably means lower earnings for deposit holders, and more advantageous terms for the monopolists in the provision of loans and services of every kind.

p The intense development of the capitalist banking system helps to accumulate the smallest savings and to involve them in active economic commerce for the benefit of big capital. Over the past 79 decade, the major banks have played an important role in providing credit resources for such rapidly developing industries as the production of the means of electronic automation and telecommunications equipment. Credit institutions are most active in financing the science-intensive (high-tech) industries. Under the impact of the energy crisis, vast amounts of bank loans have streamed into projects for the exploration and extraction of shelf oil, intense modernisation of the coal industry, and development of new energy-saving hardware and technology.

p Money-lending was already a vital activity very early in the new period. In his novel Gargantua et Pantagruel, Frangois Rabelais has the convivial Panurge saying: "It would be easier for nature to nourish the fishes in the air and to pasture deer at the bottom of the ocean than to suffer the miserly world in which no one will lend." Credit institutions gained in importance with the development of capitalism, and in the postwar period there was a most pronounced tendency for credit resources to command an ever greater share of financing in economic operations.  [79•1  No major company can nowadays do without the clearing, financial, lending and other services provided by credit institutions for any long period of time. More than ever before in the past, investment programmes now depend on whether an industrial firm is able to obtain a large loan from the bank, and on whether credit institutions will help it to float a large bond issue.

p The intensive development of trusteeship operations by the banks in many capitalist countries has led to substantial changes in the system of share-holding control by finance capital, with these operations assuming the largest proportions in the United States: in the early 1980s, capital held in trust by the banks was estimated to total $570 billion.

p More than one-half of all the assets of trust departments consists of stocks and shares. While the commercial banks in the United States are not legally entitled to purchase stock, in practice they are the major institutional “custodians” of ownership titles. The commercial banks’ trusteeship operations lead to the stable concentration of stock with voting rights, thereby tying up the most important knots of corporate control at the top of a multi-tier share-holding system. Here again one finds the same picture: in order to put through any decision, many corporations have to “agree” with the major banks, which have a sizable part of their “voting” stock in their trust funds.

p The banks, as a rule, have the powers enabling them to dispose of a large part of the property, including the funds held in trust. 80 Of especial importance here is the fact that over the past several decades there has been an ever wider spread of the practice of holding in trust the pension funds of private corporations, the liquidity of investment funds and money market funds.  [80•1  As a result, the credit funds actually concentrated by the major banks are very much larger than their share of overall bank deposits. Numerous facts show that the banks capitalise to the utmost on the additional vast resources they concentrate through their trusteeship operations, without top much concern for the interests of the credit and financial institutions they “service”. In 1983, some investment funds filed suit against the Bank of America on charges of using for its own selfish ends the funds it was supposed to manage. Thus, in an effort to avert a rapid worsening of their own liquidity, some giant banks simply transferred to interest-free current accounts large amounts of the funds deposited with them on trust.

The most powerful banks now turn out to have a much wider sphere of influence than they have had at any of the earlier stages of capitalist development. The big banks and specialised credit and financial institutions act as monopolists managing (or controlling) the bulk of the money capital. Banking institutions rapidly extending the range of their operations have been evolving into truly universal financial and credit complexes.