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Deposits and the March 2023 Banking Crisis—A Retrospective

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Abstract

In this post, we evaluate how deposits have evolved over the latter portion of the current monetary policy tightening cycle. We find that while deposit betas have continued to rise, they did not accelerate following the bank runs in March 2023. In addition, while overall deposit funding has remained stable, we find that the banks most affected by the March 2023 events are offering higher deposit rates and are growing their deposit funding relative to the broader banking industry.

Suggested Citation

  • Stephan Luck & Matthew Plosser, 2024. "Deposits and the March 2023 Banking Crisis—A Retrospective," Liberty Street Economics 20240327, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:97973
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    File URL: https://libertystreeteconomics.newyorkfed.org/2024/03/deposits-and-the-march-2023-banking-crisis-a-retrospective/
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    More about this item

    Keywords

    deposit beta; deposits; banks; funding;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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