Bank deposit balances shrink for first time since ’92
by JASON PHILYAW
For the first time since 1992, bank deposit balances fell in the first half of the year.
Deposits decreased 0.4% for the six months between January and June to $7.69 trillion from nearly $7.7 trillion, and the yields on the deposits fell to less than 1%, according to analysis from Market Rates Insight.
“Even inelasticity has its limits” said Dan Geller executive vice president at the California-based research firm. “For nearly two decades, deposit balances as a whole were very inelastic, and kept on growing despite substantial fluctuation in the average rate paid on deposits. It looks like in 2010 the inelasticity reached its limit.”