With this competition it seems that bankers will need to be more effective in attracting and retaining properly-priced deposits. Magnifying the impact of rising interest rates on the cost of funds, the percentage of deposits that are interest bearing has been rising recently. FDIC data shows an increase in percentage of interest bearing deposits over the last few quarters to the current level of 73.7%. Still far below levels of past decades - 82.5% in 2008 and 85.7% in 1988. What level do you expect this ratio of interest bearing to deposits will be in the long-run?
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Neil Stanley
President of Community Banking
TS Banking Group
Treynor, Iowa
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Original Message:
Sent: 09-11-2018 10:01
From: Barb Rehm
Subject: Tuesday Topic: An Anniversary Impossible to Ignore
Stories marking the 10th anniversary of Lehman Brothers' collapse are hard to miss this week, and it's no surprise The Wall Street Journal has the best coverage. The Journal's weekend edition has a special "The Crisis – A Decade Later" section with some great stories, including the cover piece by Greg Ip about the industry's retreat from risk-taking. But the story I liked best details the shift of fortunes among industry players. Over the last 10 years, banks have lost out to money managers like BlackRock, exchanges, and financial-technology firms. That may not surprise you, but the story puts the trends in stark relief. Consider this: Goldman Sachs' index-fund unit has gathered about $10 billion in assets since 2015 while BlackRock added $1.2 trillion! Two charts map the dramatic shift in both assets and revenues.
The story notes that this concentration of assets could be the seeds of the next financial crisis because money managers "haven't been subject to poking and prodding aimed at making sure they'll hold up in good times and bad."
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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network
Arlington VA
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