How does someone start a bank. I understand that you have to have a shit ton of money, but how does someone actually start/open a bank of their own? Can mr joe shblow, given that he is able to come up with previously mentioned “shit ton of money”, go out and open his own bank? Obviously it takes time, but what’s the process of doing so?
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You would have to apply for and obtain a state or federal bank charter, get FDIC approval, and obtain any other permits required in your area. Essentially the government wants to make sure you have a reasonable chance for success and that you will operate in a safe and sound manner.
Let’s start with the basics.
1. Yes, you need access to a significant amount of capital. For a small 1-branch bank you are probably going to need in the neighborhood of $50,000,000 in funds ready to go.
2. You will need a Business Plan to present to the government agency to show what other services such as investment management or loans or credit cards, etc you will be offering to make you an ongoing and sustainable business.
3. You then fill out several applications that will require more back-up paperwork than will fit in a small truck. This application goes to the Federal Reserve, who will go over it with a fine-toothed comb because they don’t just let anyone have a bank, because otherwise rich bad people would do bad rich people things with it.
4. Anywhere from 18 months to 10 years later, you may be approved to open a new bank.
You would have to apply for and obtain a state or federal bank charter, get FDIC approval, and obtain any other permits required in your area. Essentially the government wants to make sure you have a reasonable chance for success and that you will operate in a safe and sound manner.
Let’s start with the basics.
1. Yes, you need access to a significant amount of capital. For a small 1-branch bank you are probably going to need in the neighborhood of $50,000,000 in funds ready to go.
2. You will need a Business Plan to present to the government agency to show what other services such as investment management or loans or credit cards, etc you will be offering to make you an ongoing and sustainable business.
3. You then fill out several applications that will require more back-up paperwork than will fit in a small truck. This application goes to the Federal Reserve, who will go over it with a fine-toothed comb because they don’t just let anyone have a bank, because otherwise rich bad people would do bad rich people things with it.
4. Anywhere from 18 months to 10 years later, you may be approved to open a new bank.
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Let’s start with the basics.
1. Yes, you need access to a significant amount of capital. For a small 1-branch bank you are probably going to need in the neighborhood of $50,000,000 in funds ready to go.
2. You will need a Business Plan to present to the government agency to show what other services such as investment management or loans or credit cards, etc you will be offering to make you an ongoing and sustainable business.
3. You then fill out several applications that will require more back-up paperwork than will fit in a small truck. This application goes to the Federal Reserve, who will go over it with a fine-toothed comb because they don’t just let anyone have a bank, because otherwise rich bad people would do bad rich people things with it.
4. Anywhere from 18 months to 10 years later, you may be approved to open a new bank.
You would have to apply for and obtain a state or federal bank charter, get FDIC approval, and obtain any other permits required in your area. Essentially the government wants to make sure you have a reasonable chance for success and that you will operate in a safe and sound manner.
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In the UK it is very hard. Before September 2011, a new bank wasn’t founded for over 150 years. Since then a few more have opened but the Financial Regulations Board are almost entirely old rich men so they don’t give many people the opportunity to take from their near monopolies.
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