US Bank-Run Escalates: Deposit Outflows Top $360 Billion in Last 3 Weeks
The comments below are an edited and abridged synopsis of an article by Tyler Durden
America’s bank run is accelerating, especially when looking at non-seasonally-adjusted data, which is over $360 billion of deposit outflows from US banks in the last 3 weeks. How much of this tax related, and how much is a bank run, and how does the Fed know which is which?
Some of it is tax outflows, but the Fed is using a historical seasonal adjustment factor as if there is no bank run. After last week’s massive money market inflows, the Fed’s H.8 report will show major deposit outflows from US commercial banks (despite a bounce in some regional bank shares). The Fed’s emergency bank rescue facility usage remains high and shows no signs of easing.
On a seasonally adjusted basis, US commercial bank deposits fell $12.5 billion during the week ended April 26. Their deposits (ex-large time deposits) increased, rising $10.92 billion.
On a non-seasonally-adjusted basis, US commercial bank deposits tumbled again, down $113 billion (the lowest since April 2021). That is over $360 billion in outflows in the last 3 weeks.
And judging by recent money market inflows, the deposit outflows continued last week (deposit data lags a week to money market and Fed balance sheet data).
Large and small banks saw modest inflows (seasonally adjusted), but foreign banks saw large outflows, the largest since June 30, 2021.
What really matters is the non-seasonally-adjusted data, which saw major outflows across small, large, and foreign banks. In context, the bank run is escalating.
On the other side of the ledger, commercial bank lending rose $41.6 billion for the week ended April 26, after increasing $12.4 billion the prior week according to seasonally adjusted data.
So the banking crisis is not over, and this data does not include last week’s potential problems because the deposit and loan data lags by a week.