US banks: another wave of withdrawals from banks.
The dark clouds over the US banking system have not completely dissipated . There are still problems related to withdrawals from current accounts, which are particularly high, as is the use of emergency funds implemented by the FED.
The flow of funds continues into retail money market accounts and banks' use of the Fed's bank bailout fund remains at record highs (over $100bn), even as the Fed tries to give a different feel and fudge the data a bit.
Season-adjusted total deposits fell $78.7 billion last week, the biggest weekly "run" since March 22 (just after SVB)…
And, for a nice change, total non-seasonally adjusted deposits have been agreed, with a disappearance of deposits of $90 billion….
Big banks saw a massive deposit outflow of $78bn (SA) last week (the largest outflow since Oct '22) with small banks seeing a small outflow of $1.25bn…
Source: Bloomberg
Then, nationwide, the bank run is back, with significant deposit outflows (on both an SA and NSA basis)…
Source: Bloomberg
Interestingly, on the other side of the ledger, the picture was more mixed with small banks seeing loan volumes shrink marginally by $103 million while large banks saw loan volumes increase by $4.7 billion.
So we have a flight of capital from the deposits of the big banks, whereas previously we had a similar phenomenon from the smaller institutions. Furthermore, the drop in liquidity is made even stronger by the fact that, despite everything, the big rounds have increased loans.
Why this flight from deposits? With inflation, savers want less liquidity and more profitable commitments, so they drain liquidity from current accounts. Add in the fact that trust isn't exactly at its peak, and we have this result. So for quite a while we will see high usage of emergency funding from the Fed, and the banking system will remain a bit fragile…
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The article US banks: another wave of withdrawals from banks. comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/banche-usa-altra-ondata-di-prelievi-dalle-banche/ on Sat, 22 Jul 2023 14:39:44 +0000.