In the aftermath of two high-profile bank collapses that have undermined confidence in the system, nervous bank clients have flocked to large banks.
Those familiar with the situation told CNN that Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C) have all reported a big boost in deposits since Silicon Valley Bank got into problems last week.
A senior Treasury official told CNN earlier this week that client withdrawals from small and regional banks had moderated.
The situation is fluid, and it is unclear how much money has been poured into large banks; nonetheless, the amount is likely in the billions or tens of billions of dollars.
On Thursday alone, consumers withdrew $42 billion from Silicon Valley Bank, depleting the California financial institution’s cash reserves. By Friday, regulators had closed the bank, making it the second-largest bank collapse in U.S. history.
Citi has accelerated account openings in retail banking, small business loans, and wealth management over the past week, according to a source with knowledge of the situation.
Bloomberg News reported that Bank of America has received more than $15 billion in fresh deposits in a matter of days.
Instead than disclosing details on short-term fluctuations in deposits, banks normally reveal these information periodically.
Wells Fargo, Bank of America, and Citi all declined to comment.
Large banks are viewed as more secure due to their huge balance sheets. In addition, their status as systemically significant institutions suggests that the government would come to their aid in a crisis, as it did in 2008.
Nonetheless, the FDIC guarantees deposits of up to $250,000 per bank and each borrower, regardless of the size of the bank.
According to analysts, the FDIC’s choice to rescue uninsured customers at Silicon Valley Bank and Signature Bank shows authorities would be compelled to do the same if another bank failed.