
A new study shows that Americans pulled $472bn from big banks, more than the $100 billion priorly reported.
“First-quarter 2023 deposits dropped a record amount across U.S. banks — the steepest fall since the Federal Deposit Insurance Corp. starting collecting the data in 1984.
The $472 billion outflow in deposits outpaced the drop that banks saw following 2008 financial crash,” says Boston Business Journal.
This shatters a 39-year record.
The “primary driver” of deposit flight came from uninsured deposits, says the FDIC, as people moved to protect capital that is above the $250,000 FDIC insured maximum.
However, online-only banking models have become a big competitor to traditional banks.
So much in fact that big banks have begun to close several branches across the country.
In Philadelphia, Wells Fargo has closed 17% of its local bank branches since 2020.
PNC is not far behind, shuttering 15% of its branches in the Philadelphia area, per the Philadelphia Business Journal.
As depositors leave the banking system, money market funds have witnessed massive weekly cash inflows.
Other banks have begun to freeze bank deposits and new bank accounts.
Read: New Study Shows Nearly 190 Banks on Verge of Collapsing
NYC is Freezing New Bank Deposits at Capital One

The New York City (NYC) Banking Commission is freezing new bank deposits at Capital One (NYSE:COF) and KeyBank.
Following the first-ever public hearing held by the New York City Banking Commission on Thursday, all three members voted to freeze deposits at Capital One and KeyBank after the banks failed to submit required plans demonstrating their efforts to root out discrimination.
JPMorgan had a similar occurrence when the bank began to freeze customer bank accounts in its latest scandal.
Republican attorneys general from 19 states say the bank is “persistently” discriminating against its own clients and closing bank accounts without warning.
However, Capital One’s story is a little different.
New York City Comptroller Brad Lander, one of three members of the Commission, also voted against designating three other banks to hold public funds: International Finance Bank, PNC Bank, and Wells Fargo, per New York City’s Comptroller press release.
“Banks seeking to do business with New York City must demonstrate that they will be responsible managers of public funds and responsible actors in our communities,” said Comptroller Brad Lander.
“Unfortunately, despite several opportunities to do so, five banks failed to comply with the New York City Banking Commission’s designation process – leaving us to conclude that they are not taking meaningful actions to combat discrimination in their operations and are not responsible stewards of public dollars.
Other Recent Banking News

Morgan Stanley (NYSE:MS) CEO James Gorman said on Friday he plans to step down as CEO this year.
The bank’s board has narrowed its CEO search to three “very strong” internal candidates, Gorman said.
Morgan Stanley’s CEO candidates are the men leading the bank’s three main businesses: Ted Pick, Andy Saperstein and Dan Simkowitz, according to people with knowledge of the matter, per CNBC.
Gorman will still take on the executive chairman role “for a period of time” after stepping down as CEO, he said.
“The specific timing of the CEO transition has not been determined, but it is the board’s and my expectation that it will occur at some point in the next 12 months,” Gorman said.
“That is the current expectation in the absence of a major change in the external environment,” he continued.
Morgan Stanley’s CEO’s resignation comes after several banks have begun to experience turmoil in the banking sector.
After the collapse of Silicon Valley Bank and Signature Bank in March and First Republic Bank in April, a study on the fragility of the U.S. banking system found that 183 more banks are at risk of failure even if only half their uninsured depositors—those with deposits greater than $250,000—decide to withdraw their funds, USA Today reported.
“If a ‘confidence crisis’ can happen to First Republic, it can happen to any bank in this country,” says Jake Dollarhide, Chief Executive Officer of Longbow Asset Management.
A run on these banks could pose a risk to even insured depositors—those with $250,000 or less in the bank—as the FDIC’s deposit insurance fund starts incurring losses, the economists wrote.
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