New figures from the Federal Deposit Insurance Corporation (FDIC) show that Americans are withdrawing money annually at a pace not seen in 40 years.
According to the FDIC’s newly released quarterly report, depositors total In the first quarter of this year, accounts withdrawn $472 billion, breaking a 39-year record.
“The quarterly decline is the largest reported decline in QBP since data collection began in 1984.
This is the fourth consecutive quarter that the industry has reported a decline in total deposits. ”
According to the FDIC, a “primary driver” of deposit flight is due to uninsured deposits as people move to protect capital above the FDIC’s insurance limit of $250,000.
A good example – the amount of insured deposits held by banks actually increased during the quarter as people diversified their risk.
This massive outflow follows the failures of Signature Bank, Silicon Valley Bank and First Republic, largely triggered by the Federal Reserve’s aggressive interest rate hikes.
Money market funds are seeing massive inflows of cash each week as depositors leave the banking system.
At the end of the first quarter, the assets held by the money market mutual funds were sharply increased It hit a record $5.6 trillion, according to Crane data.
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