US bank deposit outflows, unrelated to Credit Suisse, have stabilized -US official
FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration
By David Lawder
WASHINGTON (Reuters) -U.S. bank deposits have stabilized, with outflows slowing or stopping and in some cases reversing, an official said on Sunday, adding the problems of Credit Suisse are unrelated to recent deposit runs on U.S. banks.
After officials in Switzerland announced a deal for UBS to acquire Credit Suisse on Sunday, the U.S. official said that U.S. banks have limited exposure to Credit Suisse, after reducing their exposures to the No. 2 Swiss lender in recent months.
Speaking on condition of anonymity, the official said that U.S. banking regulators were in touch with Swiss counterparts on the Credit Suisse situation.
The official’s comments on U.S. deposit outflows from smaller and mid-size banks to larger institutions prompted by Silicon Valley Bank’s failure follow similar comments by U.S. Deputy Treasury Secretary Wally Adeyemo on Friday.
“We’ve seen that over the course of the work week, deposit flows have stabilized in regional and small banks and in some cases, have modestly reversed,” he told CNBC.
Adeyemo attributed the stabilization to the systemic protection guarantees granted to uninsured depositors in Silicon Valley and Signature Bank (NASDAQ:SBNY), along with the creation of new Fed facilities that allow banks to access adequate liquidity to cover outflows.