Article Hero

US banks richer in deposits thanks to pandemic

1592820393.jpg
Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
Banks gained $2 trillion in just six months.

Last week we spoke about how the pandemic affected the US banking sector. Commercial banks and savings institutions reported a 69.6% loss and reported Q1 earnings of $18.5 billion.

According to Federal Insurance Corporation (FDIC), the banks reached a record of $2 trillion in cash deposits since January. Just in April, the deposits increased by $865 billion – more than it did in a whole year. The increase was set in motion by the government's stimuli and by the Fed's supports of the markets with an unlimited bond-buying program.

The majority of deposits went to top-banks, such as JP Morgan, Bank of America, and Citigroup. Moreover, the banks had customers who are part of the Paycheck Protection Program. Still, according to Bank of America CEO, Brian Moynihan, the checking accounts that had a balance below $5,000 had 40% more money in them before the pandemic. 

The report from the US Bureau of Economic Analysis showed that the personal savings rate went up to a record rate of 33% in April, as people had limited options to spend money during the home lockdown. Due to the $1,200 stimulus checks, the personal income grew by 10.5%.

Although some consider this to be a clear sign of an economy recover, others believe that a collapse in Dollar is imminent alongside high inflation. A stock market bubble is in sight.  

Visit CAPEX.com for more news about the latest financial events!

Sources: cnbc.com, newsopener.com


This information prepared by capex.com/za is not an offer or a solicitation for the purpose of purchase or sale of any financial products referred to herein or to enter into any legal relations, nor an advice or a recommendation with respect to such financial products.This information is prepared for general circulation. It does not regard to the specific investment objectives, financial situation, or the particular needs of any recipient.You should independently evaluate each financial product and consider the suitability of such a financial product, by taking into account your specific investment objectives, financial situation, or particular needs, and by consulting an independent financial adviser as needed, before dealing in any financial products mentioned in this document.This information may not be published, circulated, reproduced, or distributed in whole or in part to any other person without the Company’s prior written consent.
Past performance is not always indicative of likely or future performance. Any views or opinions presented are solely those of the author and do not necessarily represent those of capex.com/zaJME Financial Services (Pty) Ltd trading as CAPEX.COM/ZA acts as intermediary between the investor and Magnasale Trading Ltd, the counterparty to the contract for difference purchased by the Investor via CAPEX.COM/ZA, authorised & regulated by the Cyprus Securities and Exchange Commission with license number 264/15.  Magnasale Trading Ltd is the principal to the CFD purchased by investors.

Share this article

How did you find this article?

Awful
Ok
Great
Awesome

Read More

Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.