JPMorgan, Citigroup Flooded With Requests Following SVB’s Collapse

The sudden collapse of Silicon Valley Bank (SVB) has led to a significant movement of deposits in the US banking industry. Customers are rushing to transfer their funds from small lenders to large banks such as JPMorgan Chase and Citigroup. The two banks are attempting to accommodate these requests by accelerating their usual onboarding process to allow customers to carry out immediate transactions.


Influx of Deposits

The transfer of deposits from SVB and other local lenders to major banks increased last week and continued on March 13. In response to the surge in demand, JPMorgan is lowering the waiting period for opening an account and speeding up the process by which corporate customers can access funds. Citigroup’s private bank is attempting to open accounts as soon as an application is submitted, which is faster than their usual one-to-two-week waiting period. Several banks have also repositioned their employees to work on account openings.

While JPMorgan and Citigroup are benefiting from the influx of customers, executives claim that they are treading carefully to avoid being accused of taking advantage of the situation. According to reports, JPMorgan advised its bankers not to actively pursue clients from smaller competitors.


Emergency Measures

The US government announced emergency measures on March 13, including a new Federal Reserve lending facility for banks. While the steps have saved additional banks from going underwater, depositors are still trying to transfer their funds to larger institutions like JPMorgan, Citigroup, and Bank of America.

The fall of SVB has highlighted the dangers of keeping all of one’s capital under one institution. Several of SVB’s business clients in the technology and life sciences sectors were concerned that they would not be able to pay personnel or suppliers before authorities stepped in with a promise to guarantee all deposits.

The situation has led some to question the dominance of large banks like JPMorgan and Citigroup. However, Wells Fargo banking analyst Mike Mayo believes that “Goliath is winning in these less certain times.”