The rapid rise in interest rates across the yield curve has increased the broader public’s interest in the exposure embedded in bank balance sheets and in depositor behavior more generally. In this post, we consider a simple illustration of the potential impact of higher interest rates on measures of bank franchise value.| Liberty Street Economics
Fields of interest| www.newyorkfed.org
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.| Liberty Street Economics
The authors evaluate how deposits have evolved over the latter portion of the current monetary policy tightening cycle.| Liberty Street Economics
The Federal Reserve Board of Governors in Washington DC.| www.federalreserve.gov