Joseph Wang: "It looks like the banking panic is largely over"

It looks like the banking panic is largely over.  The two data points that I follow, the Fed balance sheet and my money market flow data, are showing encouraging signs.  So when a bank is in trouble, they borrow from the Fed as lender of last resort.  Weekly Fed data shows that borrowing is declining.  And we also show that money is going back into prime money market funds.  Prime money market funds lend to banks and during the panic people were pulling money away...  That's all coming back.  That tells me that the banking panic is over.

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I suspect, based on the aggregate data and based on what I see in the banking system, that the large banks are going to be fine.  They're going to be in good shape.  There might be some small banks that are struggling, but we have to remember that America is a very big place.  We have 4,000 banks, most of them small, and it seems like what happened over the past month is largely regional.  So I'm optimistic.

~ Joseph Wang, Fed Guy blogger, Yahoo Finance interview, April 11, 2023