U.S. small banks suffer record deposit drop after SVB, Signature failures: Fed data

Are Americans waving goodbye to small banks?

In the aftermath of the Silicon Valley Bank and Signature Bank failures and the U.S. government signaling that it would only come to the rescue of the big banks and well-connected institutions, depositors are right to be concerned.

According to new data from the Federal Reserve, bank customers took out a collective $98.4 billion from their accounts for the week ending March 15. The smaller banks experienced outflows totaling $120 billion, while larger banks saw a $67 billion increase in outflows.

What’s more, over the last 12 months, total U.S. deposits have declined more than $582 billion to $17.5 trillion.

Fed Chair Jerome Powell did tell reporters last week that conditions are stabilizing.

The next set of data in the coming weeks will confirm if Americans are confident that their deposits are protected by the White House, the Eccles Building, the Treasury Department, and the Federal Deposit Insurance Corporation.