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US banks are witnessing a big increase in deposit flight from their customers.<\/p>\n
According to newly updated stats compiled<\/a> By the Federal Reserve Economic Data (FRED) system, $78 billion exited American bank accounts from July 5th through the 12th.<\/p>\n The deposit exodus follows a two-week period of relative stability in the system as big banks invest significant levels of cash to third party intermediaries to bring in new deposits.<\/p>\n Banks are feeling the pressure to compete with higher yielding money market accounts.<\/p>\n And JPMorgan Chase CEO Jamie Dimon just issued a warning to shareholders on the banking sector’s need to keep up with demands for higher rates and avoid further deposit flight, reports<\/a> the Wall Street Journal.<\/p>\n \u201cThere is very little pricing power in most of our business, and betas are going to go up.\u201d<\/em><\/p>\n Autonomous Research analyst Brian Foran says Dimon’s alert represents a “definite curb your enthusiasm moment” for banks after an industry-wide surge in second-quarter profits.<\/p>\n US banks are also bracing for fallout in the commercial real estate sector fueled by the emergence of remote and hybrid work environments.<\/p>\n Recent reports<\/a> from S&P Global Market Intelligence found 576 American banks are overexposed to commercial real estate loans based on regulatory guidelines, which represents an increase of 30% compared to one year ago.<\/p>\n Don’t Miss a Beat SUBSCRIBE<\/a> to get email alerts delivered directly to your inbox <\/span><\/em>
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