U.S banks dropped by several spots in a list of the top 50 largest banks by assets, giving way to foreign competitors, according to Global Finance magazine.  

JPMorgan (JPM) and Bank of America (BAC) barely cracked the top 10, with JPMorgan coming in at 9th (from 8th in 2011) and Bank of America dropping to 10th place from 6th the year before. 

Overseas banks dominate the list, with Deutsche Bank (DB) at the top, jumping from second place last year to become the largest bank in the world. HSBC came in second place and last year’s top bank, BNP Paribas, dropped to the third spot.

Only five U.S banks made the top 50 list by assets, including Citigroup (C), Wells Fargo (WFC) and Goldman Sachs (GS).  Some major U.S. banks like Morgan Stanley (MS), US Bancorp (USB), Bank of NY Mellon (BK) and PNC (PNC) are noticeably absent from the list.

“It would be surprising to a lot of Americans that there are only five big U.S. banks in the top 50,” said David Hilder, bank analyst at Drexel Hamilton.  “Because a lot of the political discussion lately has been that these big banks have so much power.”

China has the most banks on the list, with six in the top 50. The U.S., UK, France and Germany all have five big banks in the top 50, according to Global Finance.  

“The reality is that the U.S. banks are competing in the U.S., and more so in the rest of the world, with a large number of large, sophisticated global banks,” said Hilder.

Many bank executives have made the point that U.S. banks are not competing on a level playing field. While U.S. banks are subject to the Dodd-Frank regulations and the Volcker Rule implemented by Congress after the financial crisis, many overseas banks are not subject to the same rules.  

However, global regulation is catching up, as all big banks will be under Basel III regulations. Basel III is a global regulatory standard developed to ensure high capital levels, and involves vigorous stress tests.

“Presumably the legislators and Congress want U.S. banks to compete on the same level as European and Asian banks,” said Hilder. “The fact that there are only five banks on the list may suggest that there could be some regulations that could be holding our banks back a bit.”