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Hot%20Money%20Could%20Make%20Banks%20Sweat

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

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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 deposits helped fuel a 21% gain in total deposits. The noninterest-bearing variety now accounts for some 30% of total
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  • Spring '12
  • PatriciaRobertson
  • Federal Deposit Insurance Corporation, Washington Mutual, Bank run, Office of Thrift Supervision, Deposit insurance, David Reilly

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