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U.S Banks; deposits hitting a record rate!

Cash is pouring out of U.S. banks at a record pace!

U.S. banks shed $206 billion in deposits in the third quarter, the second biggest decline on record.

Tweet on US bank deposit data 

Chart by Federal Deposit Insurance Corp

That extended the second quarter’s $370 billion decline and marked the first consecutive quarterly declines since 2010, according to the most recently available FDIC data back to 1984.

With $19.357 trillion in total deposits, the banking system is still flooded with cash from the pandemic era. Until 2020, deposits sat below $15 trillion.

Banks are struggling to keep up with higher yields offered by Treasurys and money-market funds, though many are reluctant to raise their own rates to match them. Instead, many banks are “holding the line” on deposits and moving out to other sources of funding, said Blake Gwinn, head of U.S. rates strategy at RBC Capital Markets.


Image: Central Bank