Washington Post on Deposit Outflows
The Washington Post published, "Bye, banks: Recent turmoil is spurring many to move their money." They write, "Bank stocks sank Friday over fresh fears that another European financial giant may be in trouble, compounding worries of a broader crisis that have led people to move hundreds of billions of dollars out of U.S. bank accounts. Overall, deposits estimated at $550 billion have moved from smaller and regional banks to large banks and money market funds in the two weeks since Silicon Valley Bank and Signature Bank failed, according to an analysis by JPMorgan Chase." They quote a financial advisor, "Turmoil in the markets always puts money in motion.... The big concern right now is: Is my money safe? How can I make it safer? People who have cash in simple savings accounts are using this as an opportunity to move their money." The Post piece continues, "A broader crisis so far doesn't seem to have come, and the U.S. government has taken great pains to reassure depositors that bank accounts are safe. But that hasn't stopped people from shifting their money around. Americans are moving hundreds of billions of dollars out of banks -- especially smaller regional banks -- into larger institutions, as well as money market funds, government bonds, high-yield online savings accounts, even cryptocurrencies and gold. In the two weeks since SVB's dramatic collapse, investments in money market funds, a type of mutual fund focused on low-risk securities, have ballooned by nearly $240 billion, according to the Investment Company Institute." It tells us, "In all, small and medium U.S. banks lost $120 billion in deposits, or 2 percent, in the week of SVB's collapse, Federal Reserve data shows. (At least some of those deposits went directly to the country's largest banks, which gained $66 billion in deposits during that period.) About 12 percent of Americans say they have taken money out from the bank 'because of the collapse of Silicon Valley Bank,' and 18 percent say they are considering doing so, according to a Yahoo News/YouGov poll released Tuesday. (It is also worth noting, though, that most people — 55 percent — said they are confident the banking system is safe.)"
