{"id":1457833,"date":"2024-02-16T21:40:00","date_gmt":"2024-02-17T02:40:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1457833"},"modified":"2024-02-16T21:40:00","modified_gmt":"2024-02-17T02:40:00","slug":"us-banks-saw-65bn-deposit-flight-last-week-loan-volumes-shrank","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/us-banks-saw-65bn-deposit-flight-last-week-loan-volumes-shrank\/1457833\/","title":{"rendered":"US Banks Saw $65BN Deposit Flight Last Week, Loan Volumes Shrank"},"content":{"rendered":"

US Banks Saw $65BN Deposit Flight Last Week, Loan Volumes Shrank<\/span><\/p>\n

\n

Having seen The Fed’s QT appear to stall in February, as Reverse Repo liquidity withdrawal accelerates,<\/strong> all eyes are once again back on the situation on bank’s balance sheets and how deposits are standing up (‘adjusted’ by The Fed’s magical seasonals).<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

And after the prior week’s miraculous surge in deposits (again, according to The Fed), last week saw total bank deposits (seasonally-adjusted) drop $57BN – the biggest weekly drop since October…<\/strong><\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

This data is from the week when Regional bank shares shit the bed thanks to NYCB…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

Interestingly, on a non-seasonally-adjusted basis, total bank deposits declined about the same as SA -$58BN (and are down $180BN YTD)…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

And, excluding foreign banks, domestic deposits dropped $52BN SA<\/strong> (Large Banks -$40BN, Small Banks -$12BN), and tumbled $65BN NSA<\/strong> (Large Banks -$57BN, Small Banks -$$8BN)<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

As the chart above shows, on an NSA basis, domestic banks have only seen one week of inflows in 2024.<\/strong><\/p>\n

As one might expect, loan volumes shrank <\/strong>during that week by just over $9BN (Large banks -$4.6BN, Small banks -$4.4BN)…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

And finally, as a reminder – despite the rebound off the lows again this week in regional bank shares, which must mean everything is awesome, right? – the regional bank crisis is still very much alive as evidenced by the red line below<\/strong> (without The Fed’s imminently expiring BTFP facility)…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

…what else are big banks (green line) going to do with all that cash burning a hole in their pockets?<\/p>\n

The bottom line is – this looks a lot like a ‘Small Bank’ crisis. <\/strong>The last time this happened, the crisis sparked a sudden $300BN ‘run’ in small bank deposits…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/em><\/p>\n

Is The Fed ‘hoping’ for a controlled bank-run this time <\/strong>– so as many small bank deposits are drained voluntarily, before they are drained all at once in a panic (and the Reverse Repo facility is empty, unable to provide any cushion)?<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 02\/16\/2024 – 16:40<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

US Banks Saw $65BN Deposit Flight Last Week, Loan Volumes Shrank Having seen The Fed’s QT appear to stall in February, as Reverse Repo liquidity…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1457833","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1457833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1457833"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1457833\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1457833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1457833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1457833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}