US banks see rush of depositors

After the collapse of three smaller banks, their biggest US counterparts are seeing a rush of depositors fearful the crisis will spread.

The largest US bank, with billions of dollars in recent days, and Bank of America Corp., Citigroup Inc. and Wells Fargo Co. are seeing higher than usual volume, according to people with knowledge of the matter. Representatives for firms didn't respond to messages, and they did not respond to them.

The financial crisis over 10 years ago demonstrated that the top six in the US are too big to fail, according to Michael Imerman, assistant professor at the University of California Irvine business school. It is safer to go with a name with a higher degree of certainty. The seizure Friday of the Silicon Valley Bank, the biggest US bank failure since the financial crisis, was caused by the fleeing depositors and sent shock waves across the global financial system. The regulators took measures to shore up deposits Sunday, in conjunction with an announcement that Signature Bank failed. The news last week that Silvergate Capital Corp. would wind down was followed by both collapses.

There are increased deposit inflows as well as increased deposit inflows. Citizens Financial Group Inc. has seen higher than normal interest from prospective customers over the past few days, and it will temporarily extend branch hours to accommodate.