Depositors in the United States have withdrawn a record $472,000,000,000 from US banks in only three months
The Federal Deposit Insurance Corporation (FDIC) has released new data showing that Americans are withdrawing funds at a rate not seen in the previous forty years.
According to the FDIC’s just-issued quarterly report, depositors withdrew $472 billion from their accounts in this year’s first quarter.
Since QBP data collection started in 1984, this quarterly fall is documented as the most significant reduction.
The sector has recorded declining total deposits for four straight quarters. The FDIC claims that the “primary driver” of the deposit flight was the flight to the safety of accounts over the $250,000 limit on FDIC insurance.
For example, the number of insured deposits held by banks grew throughout the quarter as customers chose to spread their money around and reduce their overall exposure to risk.
Following the collapses of Signature Bank, Silicon Valley Bank, and First Republic—partly caused by the Federal Reserve’s aggressive interest rate hikes—the population has begun to flee significantly.
There have been substantial weekly inflows into money market funds as depositors flee the banking sector.
According to statistics from Crane, money market mutual fund assets hit a record high of $5.6 trillion as the first quarter ended.