I was just suggesting there maybe a problem, when 'US banks are...

I was just suggesting there maybe a problem, when 'US banks are still paying 0.50% on accounts when T-bills are yielding 5.00%.'??




https://www.zerohedge.com/markets/should-scare-hell-out-bankers-regulators-worldwide

The entire $17 trillion deposit base is now on a hair trigger expecting instant liquidity.Add in social media and millions get a message, like Peter Thiel telling Founders companies to pull out, or Senator Warren gloating that SI went under, and pick up their phone open a Chase account and Venmo-ed their life savings into it in 10 minutes.

Banking will never be the same.The second, and I did a long thread on this on Friday... banks are over-reserved,after 14 years of QE, and are still paying 0.50% on accounts when T-bills are yielding 5.00%. They don’t need to compete for deposits.

What needs to be done?

Two things.

The FDIC needs to raise the deposit insurance ceiling to unlimited as they did this in 2008. Besides $250k is a made up number anyway. So make up a bigger number.

Banks need to get their deposit base to stop figuring out how to buy a 4.5% money market fund. They need to raise the interest rates they pay 3.00% - 3.50%, from 0.50%, immediately. Yes, this will kill bank profitability so expect Bank Execs to balk at doing this.

This way the public gets the message that your money is safe, no matter the bank, or the amount, and the rate paidon your money is at least competitive with other alternatives.Otherwise, if they do nothing and wait for the Fed to START a meeting at 11:30 Monday, hundredsof billions of deposits will have moved by phone and it will be far worse.