The Fed’s rescue operation was not enough to win confidence: following the successive collapses of smaller American banks, depositors stormed the largest financial institutions, fearing that the crisis would spread.
Bloomberg reports according to JPMorgan, the largest US bank, Bank of America, Citigroup and Wells Fargo & Co experienced higher-than-usual deposit inflows. According to Michael Imerman, a professor at the University of California, Irvine, the six largest American banks “too big to fail, so it’s safer to turn to them.”
The big American banks are flooded with customers trying to transfer their funds, so the bankruptcy of Silicon Valley Bank will result in the largest movement of deposits in the last decade, according to the managers. Financial institutions are trying to accommodate customers who want to transfer deposits quickly and are taking extra steps to speed up onboarding processes. Citizens Financial Group Inc., for example, recently announced that its “in the past few days, he has experienced a higher than usual interest in his services”, for temporarily extending its opening hours. Citi’s private bank, which caters to the needs of wealthy individuals, starts opening accounts the very next day, instead of waiting for a week or two.
It might already be guessed that following the collapse of the smaller banks, the big fish, including JPMorgan, would be the biggest victims of the rush.its beneficiaries“. By the way, JPMorgan had previously approached the customers of its competitor, SVB, to entice them with its various offers, as it was aware that all this might lead to the collapse of the bank. However, leaders are washing their hands because they don’t want to be accused of taking advantage of the situation. In its principles, the banking giant in question warned bankers not to actively try to lure the clients of smaller rivals.
“Defeats Goliath” Mike Mayo, banking analyst at Wells Fargo, said while JPMorgan was the “less certain times” called him his beneficiary.
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