Recent reports reveal that US banks are experiencing a significant increase in customers withdrawing their deposits.
FRED’s system reports
Updated data from the Federal Reserve Economic Data (FRED) system indicates that a whopping $78 billion was taken out of American bank accounts between July 5th and 12th.
This comes after a two-week period of relative stability in the banking system, during which big banks invested substantial sums of money to attract new deposits through third-party intermediaries.
The banks are feeling the heat to compete with money market accounts that offer higher yields.
According to the Wall Street Journal, JPMorgan Chase’s CEO, Jamie Dimon, has cautioned shareholders about the banking sector’s obligation to meet the increasing demands for higher rates and prevent more deposit outflow.
He stated that most of their business lacks pricing power, and betas are expected to rise. Analyst Brian Foran from
Autonomous Research believes that Dimon’s warning is a sobering moment for banks, following a surge in industry-wide profits during the second quarter.
American banks are preparing for the potential consequences of the commercial real estate industry affected by the rise of remote and blended work environments.
US government hands out $1,800,000
A new initiative in the United States is underway to determine the usefulness of government-funded cash handouts in helping citizens. The Denver Basic Income Project has set aside $1.8 million to provide financial assistance to those facing financial difficulties.
The program will benefit more than 800 people, divided into three distinct groups.
The first group will receive $1,000 annually, the second group will receive an initial sum of $6,500, followed by an additional $500 per month for the next 11 months, and the final group will receive $50 per year with no further payments.
The program called the Denver Basic Income Project (DBIP), is funded and approved by the Denver City Council and aims to evaluate the effectiveness of no-strings-attached financial aid programs for homeless individuals.
