Withdrawals surge at major U.S. banks amid industry volatility

Withdrawals have surged at the United States' largest banks as depositors become increasingly wary of industry volatility in the wake of the collapse of Silicon Valley Bank.

The top 25 U.S. banks, lost $89.7 billion in the week ending March 22, according to the Epoch Times. Those firms saw a $67 billion increase in deposits the week prior and are currently down $22.7 billion since the collapse of SVB.

American Institute for Economic Research economist Peter Earle told the outlet that "[t]he recent failure of Silicon Valley Bank and Signature Bank, as well as worries about the rest of the banking system (whether justified or not), has contributed to growing credit tightness."

SVB collapsed last month and was quickly followed by Signature Bank. Other financial institutions narrowly avoided total collapse with First Republic securing $30 billion in rescue deposits from other banks while international firms such as Credit Suisse also struggled to deal with industry turmoil.

U.S. banks lost a total of approximately $213 billion in deposits immediately after the SVB collapse, $196.4 billion of which came from smaller banks. While such firms gained $6 billion in deposits last week, they remain roughly $190 billion down from their pre-SVB totals.

SVB had roughly $212 billion in assets, making its collapse the second-largest such occurrence in U.S. history, the Times noted. Its failure prompted intervention from the Biden administration, which opted to use the Federal Deposit Insurance Corporation to guarantee depositor stakes in SVB beyond the normal limit of $250,000.

While the administration has contended that the taxpayer will not finance the rescue of the banking industry, critics have suggested that the FDIC fees that it levies on banks to raise funds for such activities will inevitably be passed on to average depositors.

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.