US Federal Reserve is reporting a major deposit withdrawal from the
nation’s bank accounts. The financial system has not seen such a
massive fund outflow since so called 9/11 attacks.
RT: The first week of January 2013 has seen $114 billion withdrawn from
25 of the US’ biggest banks, pushing deposits down to $5.37 trillion,
according to the US Fed. Financial analysts suggest it could be down to
the Transaction Account Guarantee insurance program coming to an end on
December 31 last year and clients moving their money that is no longer
insured by the government.
The program was introduced in the wake
of the 2008 crisis in order to support the banking system. It provided
insurance for around $1.5 trillion in non-interest-bearing accounts with
a limit of $250,000. It was aimed at medium and small banks as the
creators of the program believed bigger banks would cope with the crisis
themselves.
So the current “fast pace” of withdrawal comes
as a surprise to financial analysts because the deposits are slipping
away from those banks which supposedly were safe.