- FFIEC says $2.62T deposits at JPMorgan Chase, Wells Fargo and Bank of America are uninsured
- This puts businesses, households, and retirees at risk if the banks collapse
The Federal Financial Institutions Examination Council, FFIEC states that $2.62T deposits at JPMorgan Chase, Wells Fargo, and Bank of America are uninsured, putting businesses, households, retirees, and many others at great risk in the event of a bank failure.
Details on the FFIEC Report and Uninsured Funds
So, the FFIEC highlights an alarming situation, namely that uninsured deposits are up from 2024, based on data from 4,487 FDIC-insured institutions. More specifically, uninsured deposits grew by $126.6B, which totals ~$2.62T and is very large compared to the $43.7B growth in insured deposits.
Recall that the FDIC promises customers that deposits up to $250,000 will always be covered in the event of a collapse, and this played a big role when Silicon Valley Bank (SVB) went bankrupt. Now, covering a similar incident would be much more problematic, and if it didn’t cause the entire economy to collapse, it would hit it much harder and for a much longer period.
It should also be noted that we are talking about the largest banks that are strategically important in the U.S. economy and the rest of the world, namely JPMorgan Chase, Wells Fargo, and Bank of America, among others. If history repeats for them and the FDIC fails, it could affect many more businesses and households, and the SVB story may not seem so bad, since the FDIC was able to make sure that the majority of depositors kept their capital.
Conclusion
This brings us back to why the Trump administration is so actively promoting and implementing Bitcoin and other key cryptocurrencies – because many standard financial system problems will be secured with them.
Yes, cryptocurrencies have risks too, but adding them covers the centralized risks and gaps we see today and eliminates the single point of failure. Hopefully, cryptocurrencies will be able to fill that space before the old systems fail, which won’t necessarily happen, but is always a possibility.
Stay tuned for updates, be adaptive in the rapidly evolving financial and crypto landscape, and keep your strategy grounded, balanced, and beneficial.
Disclaimer: The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Any actions you take based on the information provided are solely at your own risk. We are not responsible for any financial losses, damages, or consequences resulting from your use of this content. Always conduct your own research and consult a qualified financial advisor before making any investment decisions. Read more
