New figures from the Federal Deposit Insurance Corporation (FDIC) show that Americans are withdrawing their money at a pace not seen in four annual decades.
According to a recent quarterly report from the Federal Deposit Insurance Corporation, depositors took out an amount the total of $472 billion from their accounts in the first quarter of this year — breaking a record in 39 years.
The quarterly decline is the largest reported drop in QBP since data collection began in 1984.
This was the fourth consecutive quarter in which the industry recorded lower levels of total deposits.
The “primary driver” for the deposit trip came from uninsured deposits, the FDIC says, as people moved to protect capital exceeding the $250,000 insured limit.
Case in point — the amount of insured deposits that banks actually hold increased during the quarter as people diversified their risk.
The exodus follows the failures of Signature Bank, Silicon Valley Bank and First Republic, which were caused in large part by sharp interest rate increases by the Federal Reserve.
As depositors leave the banking system, money market funds have seen huge weekly cash inflows.
As the first quarter draws to a close, so do the assets held by money market mutual funds rose to $5.6 trillion according to Crane data, which is a record.
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