The US has so many banks thanks to some earlier misguided regulation:
In large parts of the US, it used to be illegal for banks to have branches.
As you can guess, keeping your banks confined to one office in one city is a recipe for them being vulnerable to the fortunes of a single small area.
In contrast, their neighbour to the north, Canada, had a much more stable banking system, that was run by large national chains (just like in most other parts of the developed world).
If you want to learn more, George Selgin has written a lot on the topic. Other keywords to look for are 'unit banking' vs 'branch banking'.
In large parts of the US, it used to be illegal for banks to have branches.
As you can guess, keeping your banks confined to one office in one city is a recipe for them being vulnerable to the fortunes of a single small area.
In contrast, their neighbour to the north, Canada, had a much more stable banking system, that was run by large national chains (just like in most other parts of the developed world).
If you want to learn more, George Selgin has written a lot on the topic. Other keywords to look for are 'unit banking' vs 'branch banking'.