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
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: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Comparing Market and Supervisory Assessments of Bank Performance: Who Knows What When?
By Allen N. Berger, Sally M. Davies, ...
-
Equity and Bond Market Signals as Leading Indicators of Bank Fragility
By Reint Gropp, Jukka M. Vesala, ...
-
Equity and Bond Market Signals as Leading Indicators of Bank Fragility
By Reint Gropp, Jukka M. Vesala, ...
-
Market Discipline in the Governance of U.S. Bank Holding Companies: Monitoring vs. Influencing
By Robert R. Bliss and Mark J. Flannery
-
Subordinated Debt and Bank Capital Reform
By Douglas D. Evanoff and Larry D. Wall
-
Sub-Debt Yield Spreads as Bank Risk Measures
By Douglas D. Evanoff and Larry D. Wall
-
Can Emerging Market Bank Regulators Establish Credible Discipline? The Case of Argentina, 1992-1999
-
Predicting Bank Failures: A Comparison of On- and Off-Site Monitoring Systems
By Rebel A. Cole and Jeffery Gunther
-
The Information Content of Bank Exam Ratings and Subordinated Debt Prices
By Robert Deyoung, Mark J. Flannery, ...