Bank Run: $114 Billion Withdrawn From Big US Banks
More than $114 billion exited the biggest U.S. banks this month, and nobody’s quite sure why.
The Federal Reserve releases data on the assets and liabilities of commercial banks every Friday. The most current figures, covering the first full week of 2013, show the largest one-week withdrawals since the Sept. 11, 2001, attacks. Even when seasonally adjusted, the level drops to $52.8 billion—still the third-highest amount on record, and one for which bank experts and analysts were reluctant to give a definitive explanation.
The most obvious culprit is the expiration of the Transaction Account Guarantee program, the extraordinary federal effort to shore up the country’s non-gigantic banks during the 2008 financial crisis. Big banks were considered “too big to fail,” while smaller ones were vulnerable to runs. The TAG program backstopped their deposit bases by temporarily offering unlimited insurance on money kept in non-interest-bearing accounts. That guarantee ended on Dec. 31, so a decrease in deposits would be expected first thing in January.
But hold on: The Fed data show $114 billion leaving the 25 biggest banks—about 2 percent of their deposit base. Only $26.9 billion left all the others, equivalent to 0.9 percent of their deposit base. Experts had predicted that the end of TAG would hurt the nation’s small banks because the big ones are still considered too big to fail. “I think [customers] are going to go back to the mega banks,” the head of a regional bank in Bethesda, Md., told The Washington Post in December. “They’ve been assured by the government that mega banks are too big to fail. It’s a horrible, bad, poorly-thought-out situation.” Small banks fearfully lobbied the Senate to extend TAG, with analysts telling the New York Times that they expected $200 million to $300 million—yes, with an m—to move from affected accounts into money market funds or elsewhere.
Maybe this could be part of the reason why? People are realizing the FDIC Expanded Deposit Insurance Ended on Dec 31st.I don’t blame them for taking their money out,I don’t trust the banks either.
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Whistler Blowers, Insiders
Ya think! “Oh my goodness its a mystery” No!… its called Depression and potentially even worse than that.
America`s stock market is the only place to go if you are frustrated with getting a measly 2% on bank CDs. Investors in the last month have been averaging a growth rate of almost 10% and it is expected to continue. Bank depositors as far away as Russia who are unhappy with bank yields will be next in line. The American stock market has become a godly miracle and the world’s bank accounts are being funneled into its blessings.
polnick…ur funny! godly miricle huh…you sure you aren’t Blankenfein? if not then you’re dumb as Frankenstein…