The last few days have revealed just how bad the first quarter was for the banking sector. Credit Suisse, which in March collapsed into the arms of its main competitor UBS, recently reported that it had lost $69 billion of customer deposits in the first quarter, bringing the six-month total to an astronomical $225 billion in outflows.
Here in the United States, First Republic Bank, which in the same month was rescued by a $30 billion cash infusion in the form of secured deposits from 11 of the too-big-to-fail (TBTF) banks, just announced it lost a staggering $104.5 billion of its deposits in the first quarter, representing 35 percent of its total deposit base at the beginning of the year. This surprising revelation once again spooked the equity markets, already jittery from March’s madness. First Republic’s share price is down by over 50 percent on the news, while the NASDAQ Bank Index is down 7 percent from last week.
