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Bank Deposits Edge Up After Record Outflows, Fed Data Shows

Submitted by jhartgen@abi.org on

Deposits at U.S. commercial banks rose near the end of March for the first time in about a month, showing signs of stabilizing after the two largest bank failures since the financial crisis rocked the banking system and rattled depositors, Reuters reported. Federal Reserve data released on Friday showed deposits at all commercial banks rose to $17.35 trillion in the week ended March 29, on a nonseasonally adjusted basis, from a downwardly revised $17.31 trillion a week earlier. It was the first increase since the start of March and marked an end, for the moment, to a record flight of deposits triggered by the collapses of Silicon Valley Bank and Signature Bank toward the middle of last month. The second and third largest bank failures in U.S. history forced federal regulators to guarantee all deposits at both institutions and prompted the Fed to take emergency actions to restore confidence in the banking system. Deposits rose at both the largest 25 banks by assets and at small and mid-sized banks as well. Small banks had been particularly hard hit by deposit outflows after the back-to-back failures, with some depositors shifting cash to larger institutions on concern that any funds in excess of the $250,000 per depositor federal insurance limit might be at risk.