Bank of America accrued over $15 billion in fresh deposits Since Silicon Valley Bank’s Sudden disintegration

photo by Boyd Loving

the staff of the Ridgewood blog

Ridgewood NJ, we noticed some post on Facebook on Saturday raising concerns over crowded parking lots at Bank of America branches.  Recent banking troubles and low confidence in public institutions has given many depositors  the jitters .

Bank of America has strengthened over the years under the leadership of CEO Brian Moynihan, who some believe to have surpassed Jamie Dimon of JPMorgan Chase (JPM) in terms of leadership and running a large financial institution.

Bank of America has prioritized returning money to shareholders, as evidenced by their five-year dividend growth rate of 15% and nine consecutive years of dividend growth.

According to Reuters , Bank of America is redeploying employees in wealth management and lending to other roles within the company, a source familiar with the matter said on Friday, as higher interest rates continue to weigh on the businesses.

Within days of Silicon Valley Bank’s sudden disintegration, Bank of America accrued over $15 billion in fresh deposits, according Bloomberg.

The influx is part of the biggest deposit movement in over a decade, as worries that other lenders may fail have spurred a flight to safety toward “too big to fail” institutions.

“Too big to fail” is a term used to describe companies or institutions that are so large and interconnected that their failure would have a catastrophic impact on the economy and financial system as a whole. These companies are often considered “systemically important” because of the ripple effects their failure could cause.

The concept of “too big to fail” gained prominence during the 2008 financial crisis when several large banks and financial institutions were bailed out by governments to prevent their collapse. The fear was that if these companies were allowed to fail, it would trigger a cascade of defaults and bankruptcies throughout the financial system, leading to a severe recession or even depression.

Critics of the “too big to fail” doctrine argue that it creates a moral hazard, where companies feel emboldened to take excessive risks because they know the government will bail them out if they get into trouble. Proponents, on the other hand, argue that the potential damage caused by a large company’s failure is so great that government intervention is necessary to prevent it.