Hot%20Money%20Could%20Make%20Banks%20Sweat - Wall Street...

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Unformatted text preview: Wall Street Journal HEARD ON THE STREET DECEMBER 5, 2011 Hot Money Could Make Banks Sweat by David Reilly Banks need to look this gift horse in the mouth. U.S. banks and savings institutions are awash in deposits. In the third quarter they topped $10 trillion for the first time, according to Federal Deposit Insurance Corp. data released just before Thanksgiving. At the biggest banks— J.P. Morgan Chase , Bank of America , Citigroup and Wells Fargo —deposits rose 10%, year over year, to a combined $3.9 trillion. The growth, though, is somewhat deceiving. It isn't necessarily driven by a surge in the typical accounts retail customers use. Rather, the real action is in noninterest-bearing accounts used mostly by companies as a short-term parking spot for cash. At Bank of America, for instance, domestic interest-bearing deposits actually fell about 1% year over year in the third quarter, while noninterest bearing ones surged 21%. At J.P. Morgan, a 47% year-over-year jump in noninterest-bearing quarter, while noninterest bearing ones surged 21%....
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This note was uploaded on 01/26/2012 for the course FIN 4620 taught by Professor Patriciarobertson during the Spring '12 term at Kennesaw.

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