Steve Eisman, the investor widely known for his role in shorting the subprime mortgage market before the 2008 financial crisis, says the U.S. banking landscape is increasingly consolidating into the hands of a few large banks.
What Happened: Speaking on a financial podcast on Monday, Eisman highlighted the growing concentration of deposits among major institutions like JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC), which he said are steadily dominating the American banking sector.
Eisman noted that JPMorgan’s share of U.S. deposits has risen from 7% in 2007 to nearly 14% today.
“There are a couple of reasons for that,” Eisman said.
He pointed to the high costs of regulation and rapidly increasing technology expenses as key drivers that favor large banks.
According to Eisman, these factors make it difficult for smaller and mid-sized banks to compete.
“If we do nothing, and we keep the current policies, and there’s no M&A wave, what’s going to happen is JPMorgan, Wells Fargo, and a handful …