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Study focuses on depositor flight at Silicon Valley Bank, Signature Bank, and First Republic Bank
WASHINGTON—The Federal Deposit Insurance Corporation (FDIC) today released “Dissecting Depositor Flight: An Analysis of the Spring 2023 Bank Failures,” a detailed staff study of deposit flows at three banks that failed in the spring of 2023. Using transaction-level data from Silicon Valley Bank (SVB), Signature Bank (SBNY), and First Republic Bank (FRB), the analysis provides a day-by-day look at depositor behavior around the time the institutions were closed and placed into FDIC receivership. Prior to failure, all three banks experienced deposit outflows that were unprecedented in their size and speed.
FDIC Chairman Travis Hill said, “I have long believed that regulators need to develop a more sophisticated understanding of deposit behavior. This study provides a highly detailed account of deposit flows during the fastest bank runs in U.S. history and deepens our understanding of run dynamics in today’s banking environment.”
Using operational data from the core deposit and wire systems of the three banks, FDIC staff studied depositor behavior in the weeks surrounding SVB, SBNY and FRB’s failures. Among other things, the study found that depositors with substantial uninsured funds were far more likely to run while fully insured retail depositors generally did not run prior to the banks’ failures.
The study also suggested that other considerations are important as well. For example, the largest depositors at all three banks were significantly more likely to run than other uninsured depositors, withdrawing all or nearly all their deposits across their accounts, including accounts that may have been used for business operations. These withdrawal patterns also held true for certain categories of large depositors that maintained large insured balances on a pass-through basis.
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