It's safe to say that most Americans think our biggest banks are too big.

Aside from the latter's role in the financial crisis, this belief probably stems from the difference in size between our nation's four largest lenders and the roughly 6,000 regional and community banks that fill out the industry.

One look at the chart below seems to confirm this, as JPMorgan Chase (JPM -0.34%), Bank of America (BAC -0.91%), Citigroup (C -1.02%), and Wells Fargo (WFC 0.50%) tower over even the most dominant of their regional banking counterparts.

It's impossible to deny that these four banks are massive on both an absolute and a relative basis, but some necessary context is nevertheless missing from this chart. Namely, how do America's biggest banks compare in size to their competitors abroad?

This is important because the credit that banks provide directly fuels economic growth. Want an economy as resplendent as America's? Then you're going to need at least a handful of seriously large lenders.

"America has been the leader in global capital markets over the last 50 or 100 years, it is part of the reason the country is so strong," JPMorgan Chase CEO Jamie Dimon noted earlier this year. "As a matter of public policy, I wouldn't want to see the next JPMorgan Chase be a Chinese company . . . and all the things that that means about knowledge and experience and research and capabilities."

I couldn't agree more. But the fact of the matter is that China's three biggest banks are already larger than their U.S. peers. And the difference is even more acute when you compare the size of China's megabanks to the size of its economy.

Take the Industrial and Commercial Bank of China as an example. It boasts $4.3 trillion in assets on its balance sheet, equating to 42% of the country's annual GDP. That's 68% larger than America's biggest bank, JPMorgan Chase, which holds $2.6 trillion in assets, equivalent to only 15% of U.S. GDP.

The same can be said about other leading banks around the world as well. HSBC Holdings' assets equate to 89% of the United Kingdom's GDP. BNP Paribas comes in at 89% of France's economic output. Deustche Bank's assets are equivalent to 54% of Germany's GDP. And Japan's Mitsubishi UFJ Financial tips the scale at 51%.

The point is that American banks are surprisingly small when it comes to the metric that matters most: the size of their balance sheets relative to the size of the U.S. economy.

If you're wondering how this came to be, it all has to do with the evolution of the American banking system since the earliest days of the republic. As Charles Calomiris explains in Fragile by Design, long-standing political opposition to concentrated financial interests led most U.S. states to outlaw branch and interstate banking until political alliances started shifting in the 1970s.

Even then, it wasn't until the mid-1990s that Congress officially cleared the way for nationally charted banks like Bank of America and Wells Fargo to acquire the coast-to-coast branch networks they're known for today.

But what Congress gave with one hand, it partially took away with the other. The same legislation that allowed interstate branching effectively capped the size of bank balance sheets by disallowing mergers or acquisitions that would yield a combined share of national deposits over 10%. This is the barrier that now looms before JPMorgan Chase, Bank of America, and Wells Fargo, as each controls more than 10% of domestic deposits in their own right.

The net result is that not only are our biggest banks smaller relative to many of their competitors abroad, but they're also not likely to keep up as the latter presumably continue to grow. I don't say this to convince you that any or all of this is a good or bad thing, but rather to simply inform you that it indeed is the case.