Clients of the largest U.S. banks withdrew funds this month at the fastest weekly pace since the Sept. 11, 2001, attacks as the Transaction Account Guarantee deposit-insurance program ended and customers tapped into their year-end cash hoards, Bloomberg reported.
Net withdrawals at the 25 largest U.S. lenders totaled $114.1 billion in the week ended Jan. 9, pushing deposits down to $5.37 trillion, according to the Federal Reserve. The magnitude of the drop was second only to the decline after the 9/11 terrorist attacks, according to Jason Goldberg, a New York-based analyst at Barclays PLC.
The transaction-account protections were introduced in the wake of the 2008 credit crisis and had guaranteed about $1.5 trillion in non-interest-bearing accounts above the Federal Deposit Insurance Corp.'s general limit of $250,000. The program, designed to primarily protect large commercial accounts, expired Dec. 31. Read more.