USA – Customers withdraw money from small banks – Economy

After the collapse of the Silicon Valley Bank (SVB) two weeks ago, account holders massively withdrew funds from small US banks in the past week. According to data from the US Federal Reserve, total deposits fell to $5.46 trillion from the previous $5.58 trillion. That was the largest weekly drop to date in absolute terms and the largest percentage drop in 16 years. Small banks are those financial institutions that are not among the 25 largest US banks. At the same time, however, these institutes stocked up on even larger amounts of cash by taking out loans – obviously in order to be able to service account withdrawals. At the big banks, deposits rose to $10.74 trillion from $10.67 trillion earlier in the week. US President Joe Biden has proposed an increase in US deposit insurance beyond the current figure of up to $250,000. This could become possible if instability in the sector increases, he says on a visit to Canada. However, US banks are in pretty good shape. It could take a while for the situation to calm down.

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