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Biggest deposit drop for US banks since 9/11 attacks

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WASHINGTON (1/24/13)--Clients of the biggest U.S. banks withdrew their funds in January at the quickest weekly pace since the Sept. 11 attacks in 2001.

For the week ended Jan. 9, net withdrawals at the 25 biggest U.S. lenders tallied $114.1 billion, which drove deposits down to $5.37 trillion, according to data compiled by the Federal Reserve last week ( Jan. 23).  

At year-end 2012, deposits were roughly $5.4 trillion--the highest monthly ending total during the year and $500 billion more than at the end of 2011, Fed data indicated.

Some banking industry analysts posit that bank customers may be moving their money as a result of the expiration of the Transaction Account Guarantee (TAG) program, which was set up during the financial crisis to guarantee non-interest bearing accounts above the federal share and deposit limit of $250,000. The program expired Dec. 31.

A TAG extension was hotly pursued by bank trade groups, but was opposed by the Credit Union National Association. CUNA had criticized the TAG extension by noting the program already has cost the FDIC nearly $2.5 billion. The defeat of a bill to extend TAG was noted as a significant victory for CUNA and credit unions by press outlets.

Also, for the two weeks ended Jan. 8, banks reported total money-market-fund assets climbed $70 billion to $2.7 trillion, according to money-fund research firm iMoneyNet in Westborough, Mass.  Assets fell to $2.69 trillion in the week ended Jan. 15.

FHFA house price index ticks up 06% in November

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WASHINGTON (1/24/13)--U.S. house prices rose 0.6% on a seasonally adjusted basis from October to November, according to the Federal Housing Finance Agency's monthly House Price Index.

The previously reported 0.5% increase in October was revised upward to a 0.6% increase. For the 12 months ending in November, U.S. prices went up 5.6%. The U.S. index is 15.2% below its April 2007 peak and is roughly the same as the August 2004 index level. National home prices have not declined on a monthly basis since January 2012.

For the nine census divisions, seasonally adjusted monthly price changes from October to November ranged from a decline of 1% in the East North Central division to a 2.1% increase in the Mountain division. The 12-month changes ranged from a 0.5% increase in the Middle Atlantic division to a 14.8% increase in the Mountain division.

FHFA uses the purchase prices of houses with mortgages owned or guaranteed by Fannie Mae or Freddie Mac to calculate the monthly index.

For the full report, use the link.