The US people withdraw $78 billion from banks in just one week

Washington: The Federal Reserve’s report revealed that with the US citizens withdraw $78 billion from banks in just one week having withdrawn $78 billion from banks in just one week, it has emerged that the US Banking sector crisis is not yet over. In April, people withdrew $100 billion from the leading bank, First Republic. Later, a prime organisation, Gallup, claimed in its report that 48% of US citizens felt unsafe keeping money in banks.

In addition, the Federal Reserve Economic Data (FRED), a part of the US Central Bank, has made the report of the business information of the country’s banks public. It mentions weekly deposits in US banks. It says that $78 billion were drawn from US banks between July 5 and July 12. Moreover, it is the first incident in the recent past in which such a large amount of cash was withdrawn from US banks within a week.

The reason behind this is said to be the policy of the Federal Reserve Bank, which is the Central Bank of the US, the rise in inflation and the growing distrust in the banking sector. Besides, analysts warn that the US banking sector is being pushed further into crisis due to the Federal Reserve’s policy. Jamie Dimon, chief of the leading financial institution JP Morgan, recently issued a warning on the issue of interest rates. Dimon drew attention to the twin challenges faced by US banks in maintaining their economic stability by getting new funds and account holders.

In March, SVB, Signature Bank and Silvergate, these three US banks, had gone bankrupt one after the other in just a few days. The name of First Republic Bank also surfaced in the decline that started due to the failure of these banks. A total of $100 billion were drawn from this bank. The US Biden administration handled SVB and Signature Bank by assisting them. At the same time, JP Morgan Chase bought First Republic Bank.

Moreover, reports have emerged that after this, there have been no bank failures in the US, yet hundreds of banks are on the verge of bankruptcy. Additionally, a think tank named ‘Hoover Institution’ issued a serious warning two months ago about more than two thousand banks going bankrupt in the US. The think tank’s report shows that the dues of these banks are more than their assets, and it has also made us realise that the figure of their loans is worth two trillion dollars.

At the same time, it has also been clear from a report that almost half of the US population is worried about the safety of money deposited in banks. The Gallup report drew attention to the issue of 48% of the population not having confidence in depositing money in the bank. Furthermore, the report said that fear has been haunting the US general public that a new crisis like the 2008 Lehman Brothers crisis would arise.