The $2 Trillion in Uninsured Bank Deposits

Many thanks to Don Fishback, who alerted me to the fact that (with a lot of work) one can actually find reasonably up-to-date statistics on total uninsured deposits at the FDIC’s website. He did just that back in July, using numbers as of March 31; I’ve re-run the report using numbers as of July 31. The lines you’re looking at are line 4 and line 36: total domestic deposits held by individuals, partnerships and corporations, and estimated insured deposits.

The former comes to $6.6 trillion; the latter is $4.5 trillion. The difference, $2.1 trillion, is the total amount of uninsured deposits in the system. (It’s not exact, but it’s very close.)

Now $2.1 trillion is a lot of money: it’s three times the size of the proposed bailout, for starters. But exactly where that $2.1 trillion is, in terms of depository institutions and in terms of geography, I really don’t have much information. I am surprised at the magnitude of the number — and it would make sense if a lot of those excess deposits were being transferred into money-market mutual funds, which the government is now insuring.

I’m unclear about whether Treasury’s insurance scheme covers bank money-market accounts; I assume that it doesn’t. If Treasury wants to avoid a mass exodus of bank deposits, they might want to revisit that policy.

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