EPFR data shows that since Silicon Valley Bank failed and the financial crisis began, $286 billion has been invested in money market funds.
People have invested $286 billion into money market funds so far this month as a result of the failure of Silicon Valley Bank and the ensuing whack-a-mole financial crisis, according to data provider EPFR. That number represents the highest since the Covid crisis, which upended everything.
Larger and bigger
To clarify, neither Wall Street titans nor SVB’s true winners. The shaky status of the banking sector has entirely destroyed any hopes for a potential IPO revival. Big Banks would rather keep First Republic and other regional banks afloat than repeat their 2008 mistakes and buy them. According to Financial Times reporting using Investment Business Institute statistics, investors are specifically aiming for money market funds that contain US government debt. Money market funds are frequently low-risk, simple-to-buy-and-sell investments that benefit from rising interest rates.
The largest banks and investment firms on Wall Street rely heavily on these funds:
- On March 9, the day before SVB was dragged into a black hole generated by frightened VCs, Goldman’s domestic money funds have taken in about $52 billion, JPMorgan nearly $46 billion, and Fidelity nearly $37 billion, according to iMoneyNet statistics.
- According to Bank of America’s Wednesday statement, funds have received $286 billion, raising their assets to $5.1 trillion. In the week ended March 15, Fed data showed bank deposits dropping from $17.6 trillion to $17.5 trillion (decimals schmecimals, except when trillions are involved).
Ashish Shah, the chief investment officer for public investing at Goldman Sachs Asset Management, told the Financial Times that “we are seeing moves into money market funds by every class of investors.”
The money market trend has not yet reached our friends abroad, who were born in the States (even though the banking crisis definitely has). According to iMoneyNet, Blackrock’s overseas funds have only received $16 billion in inflows since March 9 while GSAM has only received $6 billion.