US banks report biggest capital outflow in 40 years — RT Business News
Deposit losses topped $470 billion in first quarter 2023, FDIC says
Banks in the United States saw total deposits fall by a record 2.5% in the first quarter of the year, the Federal Deposit Insurance Corporation (FDIC) reported on Wednesday.
The outflow was the largest recorded by the FDIC since it began collecting such data in 1984.
According to the report, U.S. banks lost $472 billion in deposits during the January-March period, marking the fourth consecutive quarter of outflows from the sector. The decline came primarily from uninsured funds, the FDIC said, noting that insured deposits actually rose by $255.1 billion, or 2.5%, amid bankruptcies at several regional banks.
“The most lasting effects of the industry’s response to this stress may not become fully apparent until we receive second quarter results,” FDIC Chairman Martin Gruenberg said.
The report did not cover First Republic Bank, which collapsed on May 1, becoming the third US lender to fail this year.
The FDIC also said the number of banks on its “problem list” had increased by four to 43, while assets held by banks on this list rose to $58 billion.
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Gruenberg warned that the U.S. banking sector continues to face other risks caused by inflation, rising rates and economic pressure, particularly in areas such as commercial real estate.
The S&P 500 banking index fell 2.6% on Wednesday after the report, after hitting its lowest point in about two weeks. The Dow Jones Industrial Average fell 0.4%, or 130 points, while the tech-heavy Nasdaq slipped 0.6%.
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