Deposit outflows at U.S. banks accelerated recently, driven by the larger and smaller commercial financial institutions, according to new data from the Federal Reserve.
For the week ending May 10, total U.S. commercial bank deposits declined by $26.4 billion, or 0.15 percent, to roughly $17.123 trillion, the lowest level since July 2021. That represented the third consecutive week of rising deposit outflows as the fallout from the banking turmoil in early March persists.
Large commercial banks (negative $21 billion) and small institutions (negative $2.6 billion) both saw declining deposit volumes on a seasonally adjusted basis. In addition, foreign-related banks reported a $2.1 billion drop in deposits.
Since the collapse of Silicon Valley Bank and Signature Bank, the Fed’s H.8 data show that total deposits have plunged about $476 billion.
The same report found that loans and leases decreased by $3.3 billion.
Despite the downward trajectory in deposits, CIBC Capital Markets Inc. economists don’t believe this is a worrying trend, writing that the latest figures paint a portrait of a banking system normalizing following sizable pandemic-era liquidity injections.
“Some of what we’re seeing is more a reversion to more normal conditions after ballooning liquidity during the pandemic,” bank economist Avery Shenfeld wrote in a recent research note. “The common perception is that a draining of deposits causes a drop in loans.
“While that’s a plausible story for any one institution, in the aggregate, there’s also a cause and effect in the other direction, in which a decline in loans outstanding is what actually causes a drop in aggregate deposits.”
Meanwhile, additional central bank data suggest that banks are still tapping into the Fed’s emergency lending facilities.
The institution’s H.4.1 figures—the Fed’s balance sheet—confirm that loans from the Bank Term Funding Program (BTFP) climbed to a fresh high of $87 billion for the week ending May 17.
Soon after the SVB and Signature failures, the Fed launched the BTFP, which allows borrowers to use Treasury and agency mortgage-backed securities as collateral for loans up to one year.
But while the raw data suggest that the banking system is still facing considerable stress, some public policymakers and market analysts assert that the worst is over.
Atlanta Fed Bank President Raphael Bostic believes the market stresses are subsiding, telling the regional central bank’s Financial Markets Conference on May 16 that “we’ve not seen this contagion take place.”
Fed Chair Jerome Powell reiterated at the Perspectives on Monetary Policy panel at the Thomas Laubach Research Conference on May 19 that the financial stability tools the central bank employed at the onset of the banking turmoil helped “calm conditions.”
Western Alliance Bancorporation recently supported these arguments after a May 15 Securities and Exchange Commission (SEC) filing confirmed that deposits rose by more than $2 billion in the three months to May 12.
Shares of the regional bank tumbled 2.44 percent during the May 19 regular trading session, but the stock recorded a weekly gain of about 25 percent.
U.S. regional bank stocks slumped to finish the trading week after two sources close to the situation told CNN that Treasury Secretary Janet Yellen warned bank CEOs at a recent meeting that more mergers might be necessary.
Yellen met with more than two dozen bank CEOs and executives at a meeting convened by the Bank Policy Institute (BPI) on May 18. Despite a statement reaffirming the strength of the banking system, the Treasury Department didn’t mention these remarks.
The KBW Nasdaq Regional Banking Index fell a little more than 2 percent, while PacWest Bancorp declined almost 2 percent.
If Yellen’s remarks are accurate, new mergers will continue the trend of declining competition in the U.S. banking system. At the end of 2022, there were 4,135 commercial banks, down from the peak of 14,469 in 1983, representing a 71 percent decline over four decades, according to the Federal Deposit Insurance Corp. (FDIC).
The Treasury’s cash balance in its bank account at the Federal Reserve is also heading lower as the department tries to prevent a default on the federal government’s debt. The latest update to the Treasury General Account (TGA) Opening Balance for May 18 stood at $68.332 billion, down from $94.629 billion and $316.381 billion at the start of the month.
Article from our premium news partners at The Epoch Times.
Discover the Freedom of True American Healthcare: Why America First is Revolutionizing Protection for Patriots
In a world where government overreach and skyrocketing premiums are squeezing the life out of hardworking Americans, one innovative agency is standing tall for liberty and affordability. Meet America First Healthcare—the private health insurance powerhouse dedicated to putting *you* first.
Founded by entrepreneur Jordan Sarmiento, this isn’t just insurance; it’s a shield for your family’s future, built on the unshakeable belief that private enterprise delivers better results than bureaucratic red tape.
Picture this: Jordan’s own story hits close to home for so many of us. A sudden medical emergency landed him with a staggering $95,000 bill. Under a traditional plan? He’d be buried in debt. But with America First’s patented health insurance, that nightmare shrank to just $500 out-of-pocket. That’s not a fluke—it’s the promise of coverage that works *for you*, from day one.
Breaking Free from the Chains of Conventional Coverage
Let’s face it: The status quo stinks. Marketplace.gov and big-insurance behemoths hit you with sky-high deductibles—thousands you’d have to pay before benefits even kick in—leaving massive holes in your protection. Need a routine mammogram, colonoscopy, or EKG? Good luck without forking over more cash. And don’t get us started on the gaps in dental, vision, or critical illness support when heart attacks, cancer, or kidney failure strike.
America First Healthcare flips the script. As a proud advocate for private solutions over government intervention, they craft custom plans that slash costs by 20% compared to traditional options. We’re talking comprehensive coverage that includes:
- Preventative and Wellness Care: Physical exams, screenings, and EKGs covered right away—no waiting games.
- Telemedicine Access: Virtual doctor visits anytime, anywhere, for that peace of mind.
- Accident and Critical Illness Protection: Real safeguards against life’s curveballs.
- Add-On Boosts: Dental, vision, disability, and supplemental plans to plug every leak.
Whether you’re an individual stepping off your parents’ plan, a growing family with kids in tow, or a small business owner tired of employee headaches, their tailored approach fits like a glove. Small businesses? Unlock group benefit rates usually reserved for corporate giants—without the red tape.
And for those in-between moments? Short-term insurance steps in as an ultra-affordable bridge, while life insurance ensures your loved ones are never left vulnerable.
Real Americans, Real Wins
Don’t just take our word for it. Thousands of freedom-loving families have already ditched the old system for America First. “Finally, insurance that aligns with our values and actually saves us money,” shares one client. Another raves, “Our small team got big-business perks without the hassle—it’s a game-changer.” These aren’t scripted lines; they’re the voices of patriots who’ve reclaimed control over their health destiny.
Your Move: Secure Your Shield Today
Why settle for less when you can demand better? America First Healthcare isn’t about profits—it’s about powering the American dream with reliable, value-driven protection. Plans are available year-round, no open-enrollment nonsense.
Ready to uncover the gaps in your current setup and lock in savings? Schedule your FREE healthcare review today at America First Healthcare. In under 15 minutes, their experts will map out options that fit your life, your budget, and your principles.
America First isn’t just healthcare—it’s a declaration of independence. Join the movement. Your family’s freedom starts now.