Key Takeaways
- Apollo’s top economist warned AI agents could sweep cash to high-yield accounts, draining cheap deposits.
- Deposit flight fears linked to automated yields echo concerns that led to the demise of the CLARITY Act.
- Analysts warn uniform AI agent behavior could trigger faster, more violent bank runs during crises.
An Agentic Bank Run Might Be Brewing, Says Apollo Chief Economist
The introduction of agentic technology to automate economic activity tasks might carry unprecedented risks to the financial system, as agents will have the freedom to allocate funds wherever they find better results.
Torsten Slock, former International Monetary Fund (IMF) employee and partner and Chief Economist at Apollo Global Management, a firm that holds over a trillion dollars in assets under management (AUM), warned about a possible bank run if agents like Meta’s Muse, which can operate autonomously without user input, rise in popularity.
In a short article, Slock stressed that the widespread adoption of these agentic assistants “could soon sweep household cash automatically into accounts paying 3.3% to 5.0%, instead of the 0.1% national average on checking accounts.”
Indeed, the rise of institutions like Revolut and others in the U.S., which offer higher yields, might prompt agentic assistants to move funds to these new banks, making traditional savings accounts obsolete.
“If every household used AI agents to optimize the return on their cash balances, banks could lose a large share of the cheap deposits they rely on to make loans, which would be a problem for the entire financial system,” Slock concluded.
While he doesn’t mention stablecoins explicitly, Slock’s argument resonates with what community banks have said might happen if financial institutions are allowed to offer yields on crypto deposits, and was ultimately one of the arguments that led to the CLARITY Act’s demise in the Senate.
Nonetheless, the agentic bank run thesis faced criticism, as some pointed out it would not cause a total bank run, but the end of cheap funding and of return on equity for banks that fail to adapt to the new reality.
“Business models built on friction and human laziness will (rightly!) get slaughtered in the coming years,” said Haseeb Qureshi, managing partner at Dragonfly.
Nonetheless, he also stressed that in situations like the one faced by Silicon Valley Bank (SVB) in 2023, agents will accelerate bank fallouts, as they have “much lower diversity of behavior than humans.” He concluded that “cascading agentic bank runs will likely be more violent and sudden than human ones.”
