Welcome back to yet another piece on the ongoing banking crisis, where we dig into how you can track deposit flights both in the US and Eurozone. 

While the Eurozone differs a lot from the US with respect to the availability of outside options when it comes to bank deposits, there are metrics that can give us potential hints to the state of the banking sector at home. We – as always – try to equip you with the best possible tools to navigate perhaps one of the most volatile environments seen since the GFC. Follow along! 

For every chart in the piece, we have tried to state the frequency of the data

US

The following charts have been mentioned and brought up in several of our pieces, but nevertheless they’re crucial in understanding the dynamics of the deposit outflows going on in the US. 

We are lucky to have data from the NY Fed showing the usage of the Reverse Repo facility on a daily basis. Money Market Funds (which is the main outside option for bank deposits) account for around 90% of this usage, so as the Reverse Repo facility gets used more, it could be a sign that Money Market Funds have received inflows to an extent where they have nowhere to place their money. 

The size of the Reverse Repo facility is of course influenced by a number of factors, including the amount of T-Bills flowing, regulation and more. We will stay alert on this figure to figure out how it’s going with banks.

Chart 1: Money placed overnight at the Fed RRP Facility (Daily)