With the demise of Silicon Valley Bank and Signature, customers are flocking to major US banks like JPMorgan and Citigroup to transfer money from smaller lenders. According to executives cited by The Financial Times, this is the largest shift of deposits in more than ten years.

According to the report, prominent lenders like JPMorgan Chase, Bank of America, and Citigroup had to hasten the account opening process to accommodate the demand.

According to the report, depositors prefer larger banking institutions, especially when their balances surpass the insured limit. For each type of account ownership, the Federal Deposit Insurance Corporation (FDIC) offers legal deposit protection of $250,000 per depositor per insured bank.

Yet another institution that might have been about to lose customers was First Republic Bank. According to a CNBC report, the institution recently sought financing from JPMorgan Chase to honor withdrawal requests. However, as per the executive, there were no significant deposit outflows from the bank.

After the collapse of Silicon Valley Bank, large US banks such as JPMorgan Chase and Citigroup are being inundated with customers wanting to transfer funds from smaller lenders https://t.co/7iMbWGTQTT

The Silicon Valley Bank failure became the largest failure since the 2008 sub-prime collapse. Likewise, the closure of Signature Bank served as another warning to depositors not to rely solely on one institution to store their funds. Meanwhile, this could also decide the next monetary policy move by the Federal Reserve.

After the recent distress, the tech market is counting on a rate hike pause. Something that the crypto market would also rejoice in. Economists at Goldman Sachs Group Inc. no longer anticipate a rate rise from the Fed next week. According to the banking giant, the Federal Reserve is expected to terminate its policy-tightening initiative after the central bank meeting concludes on March 22. Meanwhile, Bloomberg reported that Nomura Holdings Inc. is forecasting a cut at the meeting. 

Contrarily, Mohammed Apabhai, head of Asia trading strategy at Citigroup Global Markets, expects otherwise. Apabhai told Bloomberg that the experts don’t see an incoming systemic risk from the SVB collapse.

He noted,

“There are a few banks that the markets are concerned about. We think we’ve got a handle or a good way of actually measuring it. It’s called the EDP [electronic data processing] framework. And it seems to have worked quite well in the last 48 market hours in terms of identifying the vulnerable institutions. But the bigger ones [banks], they’re all solid at least for now.”

The post JPMorgan and Citigroup Juggling New Account and Deposit Requests as Smaller Banks Drown appeared first on BeInCrypto.

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