Bank Funding during the Current Monetary Policy Tightening Cycle
Recent events have highlighted the importance of understanding the distribution and composition of funding across banks. Market participants have been paying particular attention to the overall decline of deposit funding in the U.S. banking system as well as the reallocation of deposits within the banking sector. In this post, we describe changes in bank funding structure since the onset of monetary policy tightening, with a particular focus on developments through March 2023.
Do Big Banks Have Lower Operating Costs?
Despite recent financial reforms, there is still widespread concern that large banking firms remain “too big to fail.”