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How is that distributed? Are there banks with much higher/lower ratios? Or are most banks the same for given market (and regulatory) conditions?
by jacobr1 4y ago
How is that distributed? Are there banks with much higher/lower ratios? Or are most banks the same for given market (and regulatory) conditions?
- kasey_junk 4y agoI couldn’t find the Fred report on this (I’m sure I’ve seen it before) so couldn’t get a real distribution but generally you’ll see most banks between 70-90%. Prior to 2008 90% was considered about the top end before people freaked out. That number is now closer to 80. You will also see a few outliers at >100 (probably in very bad financial straits) and some in the 40s (probably don’t actually do much consumer lending and the deposits are for some niche usage). I think the thing that actually moved the fed to remove the reserve requirement was the big banks sitting in the 50-70 range (and of course the covid liquidity crunch). The monopoly we grant banks is in part so they will finance economic activity, if they aren’t doing that we’ve got a structural problem.