US banks took in a record $1 trillion in deposits from companies and consumers during the first quarter of the year as the economy and markets dipped amid anti-coronavirus lockdowns, according to the Wall Street Journal. The largest part of the money was received by America's four biggest banks: JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co. and Citigroup Inc.
This is the exact opposite of what happened during the Great Recession of 2008, when people withdrew their money from banks whose executives had been blamed for nearly destroying the economy, financial analysts told WSJ. In today's crisis, anxious customers "look to banks as a refuge in the economic storm".
'We believe companies viewed us as a safe haven in this period of stress,' Bank of America's chief financial officer, Paul Donofrio, said on a conference call with analysts last week, according to WSJ.
The $590 billion that the banks aggregated is nearly double the previous quarterly record of $313 billion, according to the Federal Deposit Insurance Corp (FDIC). The majority of deposits were made in March when companies drained credit lines and stockpiled cash getting ready for a recession amid fears of the pandemic.
JPMorgan, Bank of America and Wells Fargo each surpassed $1 trillion in loans in March for the first time.
As the number of COVID-19 cases surpasses 856,000 in the US, according to the most recent data provided by Johns Hopkins University, the country is far and away the most coronavirus-hit in the world with the centre of the outbreak in New York City.
Some US states, such as Georgia, have stated their intention to gradually lift the lockdown imposed to curb the spread of COVID-19 as a means of restoring an economy plunged into chaos during the pandemic.