<\/p>\n
Shark Tank\u2019s Kevin O\u2019Leary says the US banking system is set for a period of major consolidation after a loss of confidence in the financial sector.<\/p>\n
In a new Fox News interview, the venture capitalist says the number of regional banks in the US will likely drop by half in the coming years.<\/p>\n
\u201cWe have 4,100 regional banks in America. Probably in the next three years, it will be down to 2,000. They\u2019re going to consolidate\u2026<\/em><\/p>\n People are very nervous about putting their money in the bank because if another one fails and you have your cash in there, right now you\u2019re only guaranteed for $250,000.\u201d<\/em><\/p>\n O\u2019Leary\u2019s prediction comes as new data shows depositors have pulled money out of the US banking system for five consecutive quarters.<\/p>\n According to Federal Deposit Insurance Corporation (FDIC), total deposits went from $18.7 trillion at the end of Q1<\/a> to $18.6 trillion at the end of Q2<\/a> \u2013 a drop of $100 billion on a quarter-over-quarter basis.<\/p>\n Although the pace of deposit flight has slowed, Gruenberg says Americans continue to withdraw funds from banks to seek other opportunities that generate higher interest.<\/p>\n \u201cTotal deposits were $18.6 trillion, down 0.5 percent quarter over quarter, a reduction from the 2.5% decline reported in the first quarter. <\/em><\/p>\n In the second quarter, we observed the continuation of the trend in which customers are actively seeking higher yields. <\/em><\/p>\n Lower-earning accounts such as transaction, money market deposit, and other savings accounts declined by $412.8 billion during the quarter, while time deposits increased by $306.7 billion.\u201d\u00a0<\/em><\/p>\n