US Banking System Sees $78B Exit In One Week, JPMorgan CEO Raises Alarm

US banks are noticing a significant rise in consumer deposit flights.

The Federal Reserve Economic Data (FRED) system recently updated its statistics, which show that $78 billion left American bank accounts between July 5 and July 12.

The system experienced two weeks of relative stability before the deposit outflow when large banks invested vast sums of money in third-party intermediaries to attract fresh deposits.

Banks are under pressure to compete with money market accounts that pay out higher outcomes.

As per the Wall Street Journal, JPMorgan Chase CEO Jamie Dimon recently alerted shareholders about the need for the banking industry to keep up with rate expectations to prevent further deposit flights.

 Furthermore, most of their business has very little price power, and betas will grow.

After an industry-wide spike in second-quarter profits, Autonomous Research analyst Brian Foran claims Dimon’s notice is a “definite curb your enthusiasm moment” for banks.

Banks in the United States are also prepared for fallout in the commercial real estate sector, produced by the rise of remote and mixed work settings.

According to a recent S&P Global Market Intelligence research, 576 American banks are overexposed to commercial real estate loans founded on regulatory criteria, a growth of 30 percent compared to the previous year.