The Banks Are Not Alright! Banks Continue To Lose Deposits (21 Straight Weeks Of Negative Bank Credit Growth)

Confounded Interest ^ | 12/28/2023 | Anthony B. Sanders

[Kaiser8408a]

While The Who Sang “The Kid’s Are Alright” ,the same can’t be said of banks.

It has been nine months since the spectacular and sudden collapse of Silicon Valley Bank.

After witnessing three of the four largest bank failures in U.S. history in 2023, the attention of the media and the markets has turned elsewhere. Banking crisis? It is as though it never happened. Having fallen by some 40 percent in March, the NASDAQ Bank Index has recovered to within 15 percent of its high from February. In the last few months, nearly all markets have gone on a bull run, including bank stocks.

Yet, and despite the relative quiet, the banking sector is not in great shape. Here are some of the reasons why.

Banks continue to lose deposits. According to data from the Federal Deposit Insurance. Corp. (FDIC), U.S. banks have now lost deposits for six consecutive quarters. While the pace has slowed from the first quarter of 2023, in which nearly $500 billion of deposits were removed from the banking system, approximately $190 billion of deposits have been withdrawn in the last two quarters. Indeed, U.S. banks have lost a net $1.1 trillion of deposits since the beginning of 2022 when interest rates began to rise.

\

And we have 21 straight weeks of negative growth in bank credit. And The Fed still has a staggering amount of financial stimulus outstanding.

With all hell breaking loose around the world, President Biden has gone on yet another vacation, this time to the Virgin Islands to stay at the home of a big donor. But his handlers run things, not Vacation Joe.

[Leaning Right]

> Banks continue to lose deposits. <

Not a surprise. It’s probably some combination of folks needing the money now due to Bidenflation and the pathetically low interest rates banks pay.

Typical safe money market fund: 5%
Typical bank savings account: 0.2%

[Migraine]

I did my part. Drew my bank accounts down to just enough to cover monthly expenses using the banks’ capabilities.

[Osage Orange]

I guess it wasn’t the Keating 5

[Vaduz]

As Biden say your not reporting it right huh.

[KarlInOhio]

My main bank offers a savings rate of 4.65% IF you live in a state where they don't have branches. Otherwise you get a fraction of a percent. Bricks and mortar walls are awfully expensive to maintain. I can get over 5% at my broker. No much is left in my bank.

[Jimmy Valentine]

The banks that manage their loan portfolios properly
will be fine. Loan to deposit ratios should run at about 70%.
Margins have been compressed but as rates come down will recover.

[SaveFerris]

(Banks continue to lose deposits)

Many people are scrambling to pay for Resident Joe Biden’s constant inflation

[SaveFerris]

Joe Biden tries to lie like
Barack Hussein Obama lies

Joe’s just not as good at it

But he keeps trying, every day of the week.

[cgbg]

“as rates come down will recover”

It seems like everyone is convinced “rates will come down”.

However the future keeps its own secrets.

The federal debt remains insane and increasing.

That is normally not an indicator that rates will come down.

[gloryblaze]

... Indeed, U.S. banks have lost a net $1.1 trillion of deposits since the beginning of 2022 when interest rates began to rise...

I'd think the rising rates would attract dollars to banks.

[Vaduz]

Agree but in his mined he believes his words it’s why he tells the media your not reporting it right.

psycho is the world he lives in.

[SaveFerris]

Or it could be that Joe is just a persistent congenital, pathological liar.

[sauropod]

.

[mbrfl]

>>”While The Who Sang “The Kid’s Are Alright” ,the same can’t be said of banks.”

You’ve got to really go out of your way to make some connection between The Who and a story about banking. But the writer found a way. Impressive.