“Why wealthy customers are the ‘most worrisome’ for banks right now”
September 4, 2023
“Money-market fund assets reached a new all-time high this week as interest rates above 5% continue to attract investors at a time when the Federal Reserve appears determined to keep rates elevated for some time…
Since the beginning of January deposits at all US banks have fallen by $371 billion, according to data from the Federal Reserve, while money market funds have risen by more than $769 billion. Those outflows slowed during the summer, but deposits are still down for bigger banks since the end of June.
The greatest flight risk is still from the wealthy. Deposits from wealth management and corporate accounts have both fallen nearly 13% so far this year through July, according to data provider Curinos, although both stabilized during the month of July. August data is not yet available…”
Surprise, surprise, the rich know how to protect their wealth. It shouldn’t take a genius to figure that out.