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Look at it this way: at least they’re not stashing cash under the mattress or in ceiling tiles.

Following the collapse of Silicon Valley Bank and subsequent whack-a-mole banking crisis, people have poured $286 billion into money market funds so far this month, according to data provider EPFR. That’s the most since the Covid crisis turned the world upside-down.

From Big to Bigger

To be clear, there have been no real winners from SVB’s implosion — and that includes the Wall Street giants whose money market funds are ballooning. Banking’s shaky ground has put any hopes of a potential IPO revival completely on ice. Meanwhile, similarly sized regional banks like First Republic have teetered on the brink of insolvency, and Big Banks would rather perform financial gymnastics to keep them alive than relive their 2008 nightmares and buy them outright. Investors rushing into money market funds — mostly easily bought-and-sold low-risk assets that benefit from high interest rates — are specifically targeting ones that hold US government debt, according to Financial Times reporting citing Investment Company Institute data.

The funds are a mainstay of Wall Street’s biggest banks and investment houses:

• Since March 9, the day before SVB got sucked into a black hole created by panicking VCs, Goldman’s domestic money funds have seen nearly $52 billion in flows, while JPMorgan has taken in almost $46 billion, and Fidelity nearly $37 billion, according to iMoneyNet data.
• Overall, more than $286 billion has entered money market funds, pushing the value of their assets to an all-time high of $5.1 trillion, Bank of America said on Wednesday. Meanwhile, Fed data shows bank deposits declined from $17.6 trillion to $17.5 trillion in the week through March 15 (decimals schmecimals, except when trillions are involved).

“We are seeing shifts into money market funds by every segment of investor,” Ashish Shah, Goldman Sachs Asset Management’s chief investment officer for public investing, told the Financial Times.

Born in the USA: The money market trend has not, so far, reached our friends abroad (even though the banking crisis definitely has). Since March 9, Blackrock’s international funds have only seen $16 billion in inflows while GSAM’s has only seen $6 billion, according to iMoneyNet.