I think there are two sides to this story (about how large banks are gobbling up deposits and regional banks are flat or declining) and both of them are very technically-inflected: https://www.wsj.com/articles/the-biggest-banks-are-gobbling-up-deposits-heres-whos-not-1524999612 … (for further analysis, see here: https://www.crnrstone.com/insightvault/2018/05/01/fis-need-big-banks-deposit-domination/ … ) The sides:
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This was a sensible strategy for treasury folks when moving money around was friction-ful, but since they can now administer 8 accounts at different institutions about as easy as one account (remember: literally their job) on their own doesn't-suck-at-being-a-computer...
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... they can afford to say "Wait, goodness, I have *ten million dollars* to place. It is *exactly* as easy to put it in a money market fund at
$FOO as it is to buy a CD at your bank. The MMF *strictly dominates* your offering. Why. Would. I. Do. That."Show this thread -
Anyhow, a quote I like from the analysis article (linked above): > Checking accounts have become "paycheck motels"--temporary places for people's money to stay before it moves on to bigger and better places.
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For at least some consumers there is a precarity angle to that statement, but the classes which historically kept materially-sized balances in checking just have better options these days, and no particular social reason to let banks use them as a low-cost funding source.
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End of conversation
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