Mystery Exodus: $114B Withdrawn From Banks in Jan.

Fed data shows post-9/11 record
By Matt Cantor,  Newser User
Posted Jan 24, 2013 5:03 AM CST
Updated Jan 24, 2013 7:06 AM CST
A Bank of America branch in downtown Miami.   (AP Photo/Lynne Sladky)

(Newser) – The country's biggest banks have seen $114 billion leave their coffers this month, with withdrawals in the first full week of the year hitting a post-9/11 record, according to Fed data. Seasonal adjustment cuts the figure to $52.8 billion, which remains the third-highest ever recorded. Bloomberg is trying to get to the bottom of the mystery. One potential explanation: The government's Transaction Account Guarantee program, which sought to protect smaller banks from runs, ended Dec. 31.

But the smaller banks lost just $26.9 billion this month—0.9% of their deposit base, compared to the 2% lost by the 25 biggest banks. Another theory, then: The records come from "a noisy database," which is particularly "wacky" in the first quarter, says one expert, so maybe we shouldn't make much of the occurrence. After all, it's been an odd month financially, between reactions to the fiscal cliff and a payroll tax hike. It's also possible that, after a good year for the stock market, investors are feeling more comfortable exiting federally-backed accounts. And in the end, "one week is just a very thin slice" of data, says an analyst. Still, stay tuned.

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