The Bank Term Funding Program and the Recession Risk

Bank deposits have dropped, but there hasn't been an all-out bank run. U.S. commercial bank deposits were $17.2 trillion as of March 29, 2023. That's about a 3% decline in deposits from the end of February 2022. The average 60-40 portfolio lost around 15% according to the Wall Street Journal.

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How accelerating bank deposit withdrawals could harm the economy, including real estate prices. How dollars slosh around the financial system but always seem to end up at the Federal Reserve.

Topics covered include:

How many deposits have left banks since the Silicon Valley Bank collapse
How much have banks borrowed from the Federal Reserve to meet deposit withdrawals
Why exiting deposits are harming bank profits and causing them to make fewer loans
How the credit crunch could hurt commercial real estate values
How money market mutual funds differ from banks
How today's banking crisis is similar to the 1980s savings and loans crisis
What should investors do to protect their wealth

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Show Notes

Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks—The Federal Reserve

Assets and Liabilities of Commercial Banks in the United States—The Federal Reserve

All U.S. Banks Net Interest Margin—BankRegData

Current Treasuries and Swap Rates—Chatham Financial

Options trading surges as investors brace themselves for US regional bank volatility by Stephen Gandel and Nicholas Megaw and Colby Smith—The Financial Times