US banks hoard $3.3 trillion in cash amid fears of an economic slump

Since March banking crisis, US banks hoarding $3.3 trillion in cash amid economic slowdown fears.
Cash pile slightly lower than $3.49 trillion peak after SVB collapse, but still above pre-pandemic levels.
March crisis spooked lenders, leading to cutback in credit issuance not yet recovered.
Banks prefer holding cash as insurance against potential US downturn this year.
Moody's downgraded ratings of some banks in August on tougher operating environment.

businessinsider.in

Relevant topic timeline:

9/13/2023

Bank Deposits See Biggest Outflow Since Failure of Silicon Valley Bank as Fed Ramps Up Support for Distressed Banks

US banks are experiencing significant deposit outflows, with total bank deposits plunging by over $70 billion in a week, the lowest levels since May, leading to concerns about the ongoing regional banking crisis; meanwhile, US commercial banks have also suffered significant losses in deposits, with 60% of deposits moving to higher-yielding money market funds, and the balance of unrealized losses on securities at commercial banks rising to $558 billion in Q2; to address these issues, the Federal Reserve has reached an all-time high of $107.8 billion in its banking loan facility to provide funding to distressed banks.