- Bank of America added $15 billion in deposits, as JPMorgan and Citigroup saw big gains too.
- Money is fleeing toward “too big to fail” banks as SVB’s failure sparks panic.
- Wednesday’s drop in Credit Suisse shares reignited fears about the health of banking.
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Within days of Silicon Valley Bank’s sudden disintegration, Bank of America accrued over $15 billion in fresh deposits, sources told Bloomberg.
The influx is part of the biggest deposit movement in over a decade, as worries that other lenders may fail have spurred a flight to safety toward “too big to fail” institutions.
Reuters and Bloomberg reported that Citigroup, JPMorgan and Wells Fargo are also adding billions in deposits. Banks have had to accelerate the onboarding process for new customers, given the heightened demand.
But the lenders have avoided actively soliciting customers from other banks out of fear that deposit outflows could worsen, sources told Reuters.
Other institutions have seen inflows too. Charles Schwab clients poured $4 billion into the firm at the height of SVB panic on Friday, said CEO Walter Bettinger. That’s double the daily inflows of about $2 billion that Schwab has been averaging so far this month, he told CNBC on Tuesday.
Last week, panic erupted when SVB disclosed a $1.8 billion loss from the sale of a bond portfolio. The bank run that ensued spread fear throughout the banking industry, especially regional lenders.
The massive shift to the banking giants comes despite federal regulators guaranteeing SVB deposits beyond the typical $250,000 limit, raising expectations that all deposits throughout the US financial system will receive similar backing.
On Wednesday, worries about the financial system extended to Europe, as Credit Suisse stock tumbled 20% after a top Saudi backer said more investments would not be coming.
Get the latest JPM stock price here.