The Federal Deposit Insurance Corporation released on May 14 a staff study titled “Dissecting Depositor Flight: An Analysis of the Spring 2023 Bank Failures,” which examines deposit flows at Silicon Valley Bank, Signature Bank, and First Republic Bank. The report analyzes transaction-level data to provide a detailed account of depositor behavior around the time these banks were closed and placed into FDIC receivership.
The topic is important because all three institutions experienced deposit outflows that were unprecedented in both size and speed before their failures. The findings shed light on how different types of depositors reacted during what has been described as the fastest bank runs in U.S. history.
FDIC Chairman Travis Hill said, “I have long believed that regulators need to develop a more sophisticated understanding of deposit behavior. This study provides a highly detailed account of deposit flows during the fastest bank runs in U.S. history and deepens our understanding of run dynamics in today’s banking environment.”
The analysis used operational data from core deposit and wire systems at each institution to examine depositor actions leading up to their closures. According to the study, depositors with substantial uninsured funds were much more likely to withdraw their money than fully insured retail customers, who generally did not withdraw prior to failure.
Additionally, the report found that among uninsured customers, those with the largest balances were especially likely to move their funds quickly—often withdrawing all or nearly all deposits across multiple accounts, including those used for business operations. This withdrawal pattern was also seen among some large depositors holding significant insured balances through pass-through arrangements.
These findings may inform future regulatory approaches by providing insight into how different categories of bank customers respond under stress.
