American banks are chasing consumers to open new accounts, after a massive exodus of deposits over the past year led to a drain in capital.
U.S. banks borrowed a total of $120 billion through the federal funds market on Jan. 27, the largest single day record since 2016, The Wall Street Journal reported.
The problem began at the start of the COVID-19 pandemic, when American corporations flooded banks with excess cash deposits, forcing their lenders to turn them away.
The Federal Reserve lowered interest rates to near zero and launched bond-buying programs in early 2020, to enable customers to raise funds at low cost and stimulate the economy….