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Available for Sale? Understanding Bank Securities Portfolios

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Abstract

It’s natural to think of banks as intermediaries that take in deposits and use them to make loans to businesses and individuals. But in fact, loans make up only 45 percent of the assets of U.S. banking organizations. What’s the rest? A large chunk, representing 24 percent of total assets, is accounted for by securities, such as U.S. Treasury and foreign government bonds, mortgage-backed securities (MBS), municipal and corporate bonds, and equities. In this post, we take a tour of bank securities portfolios, making use of charts and statistics from the Federal Reserve Bank of New York’s report on Quarterly Trends for Consolidated U.S. Banking Organizations. We also discuss reasons why securities represent such a significant part of U.S. banking firm balance sheets.

Suggested Citation

  • Angela Deng & Tara Sullivan & James Vickery, 2015. "Available for Sale? Understanding Bank Securities Portfolios," Liberty Street Economics 20150211, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:87010
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    More about this item

    Keywords

    risk; securities; bank;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services

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