The advantages of boots on the ground
Manhattan’s Chinatown are about as different from each other as two places in the same state can be. One is a small town in the bucolic Finger Lakes region, where almost everyone is a white English-speaker. Chinatown packs nearly ten times as many residents, many of them foreign-born and Chinese-speaking, into a much smaller space. What links them, and many other small towns and neighbourhoods across America, is financial services: both host community banks that cater to local needs.
Their detractors get one thing right: the large number of American banks—over 4,100 at the end of last year, compared with 325 in Britain and some 80 in Canada—is an artefact of history. Early Americans’ suspicion of federalism translated into suspicion of big banks and a national banking system. Alexander Hamilton established a sort of central bank in 1791; it lasted just 20 years, as did its successor, which closed in 1836. The 19th century was awash with banking crises.
Having so many banks makes America an outlier among developed countries, but by historical standards the current number is low: in 1921 America had well over 30,000 banks, and as recently as 1984 it had almost 15,000. Bank failures, especially during the savings-and-loan debacle of the 1980s and the 2007-09 financial crisis, as well as mergers have since driven down numbers. On May 1st the latest failure,Many of the banks that have survived serve small towns and rural communities.
Other community banks serve specific populations. Thomas Sung, an immigration lawyer who came to New York from Shanghai, started Abacus Bank in 1984 to make residential and commercial property loans to new immigrants. It has branches in Chinese neighbourhoods in Manhattan, Brooklyn and Queens, as well as one each in New Jersey and Philadelphia.has had just five presidents since its founding in 1887; Frank Hamlin, who currently fills the role, is the founder’s great-great-great grandson.
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