The American banking system reached a milestone late last month: For the first time, there was more than $10 trillion in deposits at our nation's banks and savings institutions. Maybe the most interesting thing about this is that it's not normal consumer accounts, like CDs and savings accounts, that are accounting for the growth. In fact, interest-bearing deposits actually fell by 1 percent over the past year, according to the Wall Street Journal.
So what's the reason for all that growth? It's actually non-interest-bearing accounts of the type used by businesses to put their cash short-term. Those types of accounts increased by 30 percent over the past 12 months, reaching a total of $2 trillion.
We've discussed many times the amount of cash that is sitting in the coffers of many American corporations; these are those coffers. The Journal points out that we can expect these deposits to disappear from retail banks' bottom line just as quickly as they showed up there.
No comments:
Post a Comment