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10 sats \ 2 replies \ @BlokchainB 29 Dec 2023 \ on: U.S. Banks Confront Unrelenting Deposit Erosion econ
Scary to see with a fractional reserve banking system.
But isn’t most of these “missing” deposits making it to money market funds? Rates started to rise right when these deposits started to disappear right?
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150 sats \ 1 reply \ @TomK OP 29 Dec 2023
Correct. A lot went into MMFs. But this money was attracted by yields moving higher due to the sell-off before.
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50 sats \ 0 replies \ @niftynei 29 Dec 2023
Money moving from bank deposit accounts into MMFs seems extremely logical given the interest rate diffs.
I’d also heard that crypto earn accounts were causing big drawdowns in deposits last cycle. No one wants to let their money sit at 0%
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