Money is moving out of the banking system

State of play: The overwhelming majority went into funds that invest in only the safest U.S. government securities, such as short-term Treasury bills and overnight loans to the Federal Reserve, known as "reverse repos."

• "This suggests institutional deposits are leaving the U.S. banking system," wrote analysts with Moody's, referencing the large deposits controlled by corporations and small businesses that are not explicitly insured by the FDIC, due to their size.
• Such accounts have appeared especially flighty since the crisis broke out.

Meanwhile: Some of the cash moving into money market funds also comes from the sales of stocks and bonds that picked up amid the banking jitters.

• For example: About $10 billion flowed out of equity and bond mutual funds in recent weeks.

Between the lines: While government-bond-focused money market mutual funds are not explicitly guaranteed by the government, they can conceivably be considered safer than banks, since they use investors' cash to buy some of the most highly rated, short-term, and easy-to-trade investments on Earth.

• The concern about banks is that, like Silicon Valley Bank, they invested in longer-term government bonds that can generate losses if they're forced to be sold to come up with cash for depositors.

• Oh, and the yields investors earn for stashing cash in money market funds are now actually quite high — more than 4% in some cases — compared to bank deposits (now yielding roughly 0.35%, the FDIC says).

The bottom line: "Not only are money market funds offering superior yields, but they also look safer than bank uninsured deposits," wrote JPMorgan analysts in a note last week.