Why is it important to specify large, national banks?
It’s important to understand the distinction between a state-chartered bank and a federally chartered bank.Because of their role as financial intermediaries in the economy, banks must operate under a government charter that regulates their activities. Under our dual banking system, banks can choose to operate under a state or a federal charter, with their choice based on the charter rules that best fit their operations. For example, one state charter might allow a bank more flexibility on interest rate offerings to its customers than charters of other states or the federal government. If such flexibility is crucial to the bank’s business plan, then it might choose to operate under that state charter. Most banks today are state chartered, and many of these banks operate in multiple states, though the largest banks tend to be federally chartered. It is these large, federally chartered banks that raise concerns because of the disproportionate level of resources they bring to their markets
