Great Recession 2.0? Americans Pull Hundreds of Billions out of Banks at Fastest Pace in Four Decades

Bank Collapse

by JD HEYES at

Americans are pulling hundreds of billions of dollars out of banks at the fastest pace in nearly 39 years as many economic experts are beginning to predict a repeat of the 2008 “Great Recession.”

According to an analysis of the most recent data from the Federal Deposit Insurance Corporation (FDIC), “depositors took a total of $472 billion out of their accounts in the first quarter of this year – shattering a 39 year record,” the Daily Hodl reported.

“The quarterly decline is the largest reduction reported in the QBP since data collection began in 1984. This was the fourth consecutive quarter that the industry reported lower levels of total deposits,” the FDIC report said.

According to the FDIC, the “primary driver” behind the withdrawal of deposits was the movement of uninsured deposits as individuals sought to safeguard funds exceeding the FDIC-insured limit of $250,000. Interestingly, during the same period, the amount of insured deposits held by banks actually saw an increase, as people opted to diversify their risk, the outlet reported, adding:

The mass exodus follows the failures of Signature Bank, Silicon Valley Bank and First Republic, which were triggered in large part by the Federal Reserve’s aggressive interest rate hikes.

As depositors leave the banking system, money market funds have witnessed massive weekly cash inflows. As the first quarter came to a close, assets held by money market mutual funds surged to $5.6 trillion according to Crane data, representing a record high.

During the Great Recession of 2008-09, Americans lost homes and trillions in market value and savings. It was a severe economic downturn that started with the bursting of the US housing bubble and quickly spread to other countries.

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