Dissecting Depositor Flight: An Analysis of the Spring 2023 Bank Failures (FDIC)
Dissecting Depositor Flight: An Analysis of the Spring 2023 Bank Failures
Prepared by Karyen Chu, Nick Frazier, Christopher Martin, Neil T. Agarwal, Jocelyn Kuo, Joyce Northwood, Terrance Oey, Christina Reed, Alex Rodrigue, Alexis Starr in here.
TAKE AWAYS
It is estimated that 94 percent of all domestic deposits at SVB were uninsured as of year-end 2022, which matches SVB’s publicly reported uninsured deposit shares.
All three banks had significant concentrations of deposits among a relatively small number of depositors. Of the three banks, SBNY had the highest concentration of deposits on March 6, with top depositors holding 62 percent of total deposits. Top depositors held 39 percent of total deposits at SVB and 50 percent of total deposits at FRB.
Between March 7 and March 17, each bank had “one day” in which net deposit outflows reached 20 percent or more of its March 6 deposits and 20 percent or more of its top depositors ran. This rate of deposit outflow is unprecedented.
