U.S. Banks Suffer Year-End Drop in Deposits

At the 25 biggest U.S. bank, the net decrease in deposits was $114.1 billion in the week that ended Jan. 9, according to Federal Reserve data. This is the biggest drop in deposits since the week of Sept. 11, 2001, after which deposits declined following the terrorist attacks, Bloomberg reported.

One possible explanation for the significant outflow of deposits is the recent expiration of the Transaction Account Guarantee program, which offered unlimited deposit insurance on non-interest-bearing deposit accounts.