From WWW.REUTERS.COM
March 24 (Reuters) – Deposits at small U. S. banks dropped by a record amount following the collapse of Silicon Valley Bank on March 10, data released on Friday by the Federal Reserve showed.
Deposits at small banks fell $119 billion to $5.46 trillion in the week ended March 15. That was more than twice the previous record drop and the biggest decline as a percent of overall deposits since the week ended March 16, 2007.
Borrowings at small banks, defined as all but the biggest 25 commercial U. S. banks, increased by $253 billion to a record $669.6 billion, the Fed’s weekly data showed.
“As a result, small banks had $97 billion more in cash on hand at the end of the week, suggesting that some of the borrowing was to build war chests as a precautionary measure in case depositors asked to redeem their money,” Capital Economics’ analyst Paul Ashworth wrote…. (Read more)
