Banks have tons of deposits, but they’re not lending them out. From Tyler Durden at zerohedge.com:
There was a remarkable disclosure in the latest JPMorgan earnings report: the largest US bank – an entity historically best been known for making loans to the broader population at least until the Fed nationalized the bond market – reported that in Q2 its total deposits rose by a whopping 23% Y/Y and up 4% from Q1, to $2.3 trillion, while the total amount of loans issued by the bank was flat both sequentially and Y/Y at $1.04 trillion.
In other words, only for the second time in its history – Q1 2021 being the first one – JPM had 100% more deposits than loans, or inversely, the ratio of loans to deposits is now 50% (it did post a modest rebound from an all time low in Q1).
An even more epic divergence between total deposits and loans, emerges at Bank of America where deposits similarly hit a new all time high of $1.91 trillion, even as the bank’s loans have continued to shrink at an alarming, deleveraging (and deflationary) pace and are now at $927 billion, nearly $100 billion below their level as of Sept 30 2008: in other words, there has been 12 years with zero loan growth at Bank of America, while the bank’s deposits have doubled!