- The U.S. banks are flowing into deposits
- Since January, the total deposits in the banks are $2 trillion
- The gains are mainly concentrated in the biggest institutes in America like Bank of America, Citigroup, and JPMorgan
Deposits in the US Banks
According to the data provided by the FDIC, the U.S. banks are now swimming in money even in this COVID-19 pandemic. The data shows that since January when the virus hit the nation for the first time, there has been a rise in bank deposits. The deposits have increased to $2 trillion, which is a record in the U.S. bank history.
The money is flowing into the U.S. banks, and it is building record amid this pandemic. Data reveals that this year only in April the bank deposits grew approximately $865 billion. This amount is more than the total deposits of the entire 2019.
The US government unleashed billions of dollars to aid small individuals or businesses through stimulus checks as well as several unemployment benefits. At the same time, the Federal Reserve started a blast of efforts to provide support to the financial market.
The concentration of the Deposit Gains
FDIC revealed that more than two-thirds of the entire gains went to the top institutions. The gains were concentrated in industries like Bank of America, Citigroup, and JPMorgan. These are the greatest banks in the USA by their assets. According to the data, these institutes grew a lot faster compared to the rest in the first quarter. These banks were the survivors of the last 2008 crisis.
Brian Foran is an analyst at the Autonomous Research. He said that the growth of these banks was totally extraordinary. The banks were full of cash.
There are many reasons why these megabanks of America are the main beneficiaries of these deposits. When the states started the shutdowns during March, Boeing and Ford drew around tens of billions of cash from their lines of credit. The money was parked at the banks initially making those loans.