The Liability Structure of FDIC-Insured Institutions: Changes and Implications

FDIC, Banking Review Series, Vol. 18, No. 2, 2006

37 Pages Posted: 22 Feb 2007

See all articles by Lynn Shibut

Lynn Shibut

affiliation not provided to SSRN

Christine Bradley

U.S. Federal Deposit Insurance Corporation (FDIC)

Abstract

Depository institutions have traditionally looked to deposits to fund their asset growth. But since 1978, the value of bank assets has increased proportionally much more than the value of bank deposits: between 1978 and 2005 the value of assets held in commercial banks insured by the Federal Deposit Insurance Corporation (FDIC) rose by nearly 500 percent, but total deposits held by these same institutions increased by only 393 percent. And between 1978 and 2005, the percentage of U.S. banks that were able to fund at least two-thirds of their total assets with core deposits fell from nearly 91 percent to 59 percent. In addition to core deposits shrinking, banks are facing increased interest costs since bank customers are reacting to higher interest rates and moving their money out of lower-yielding bank accounts and into certificates of deposit and other higher-paying accounts. As a result of these developments, bank liability management demands more attention today than it did just a few years ago.

Suggested Citation

Shibut, Lynn and Bradley, Christine, The Liability Structure of FDIC-Insured Institutions: Changes and Implications. FDIC, Banking Review Series, Vol. 18, No. 2, 2006, Available at SSRN: https://ssrn.com/abstract=964491

Lynn Shibut

affiliation not provided to SSRN

Christine Bradley (Contact Author)

U.S. Federal Deposit Insurance Corporation (FDIC) ( email )

550 17th Street NW
Washington, DC 20429
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
195
Abstract Views
1,509
Rank
281,005
PlumX Metrics