Why Money Is Leaving The Banking System | Joseph Wang & Lou Crandall

Adolf Goebbels
Published on Apr 16, 2023
On today's episode of Forward Guidance Lou Crandall, Chief Economist of Wrightson ICAP & Joseph Wang CIO at Monetary Macro join the show to discuss the fallout of the recent bank panic. With two monetary plumbing experts on the show, we take the opportunity to cover a wide range of topics including the real reason bank deposits were leaving banks, the impact of the record $2 trillion parked in the reverse repo, how the Fed can use interest rates to control financial stability and the looming debt ceiling.

In the opaque world of financial plumbing, there are no two better guests to welcome to the show, but to hear all this and more, you'll have to tune in!
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Today's show is sponsored by Public.com: Get a 4.8% yield when you open a government-backed Treasury Account.* That's a higher yield than a high-yield savings account.** Go to https://Public.com/forwardguidance

*26-week T-bill rate (as of 10/4/23) when held to maturity. Rate shown is gross of fees.
**As compared to the national high-yield savings average of 3.43% (Source: Time.com/NextAdvisor as of 12/30/22).
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Timestamps:

00:00 Introduction
00:54 Silicon Valley Bank, Reminiscent of The Savings & Loan Crisis?
06:08 Why Are Deposits Leaving Banks?
11:30 The Plumbing of Treasury Debt
21:34 The Reverse Repo Is A Danger To The Banking System
34:12 Public.com Ad
35:18 How The Fed Can Control Financial Stability Using Interest Rates
50:39 The Debt Ceiling
01:05:56 The Reserve Gap
01:07:43 The 2019 Repo Crisis: Everyone Has A Plan, Until They Get Punched In The Nose
01:13:57 Will Banking Turmoil Lead To A Credit Crunch?
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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.