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This is FUD without analytic support. Loan portfolios are floating rate and pricing for loans has been stable. You need to look at interest rate exposure which
by the_optimist 4y ago
This is FUD without analytic support. Loan portfolios are floating rate and pricing for loans has been stable. You need to look at interest rate exposure which is not in the loan portfolio.
- AYBABTME 4y agoI would guess that FRB's loan portfolio is heavy on fixed rates. At least that's what the products they've sold looks like.
- snotrockets 4y agoProducts sold to customers may not be assets held.
- AYBABTME 4y agoThey specifically don't resell the mortgages, it's part of their marketing.
- Schnitz 4y agoIt’s not FUD. If the government sends the message that depositors will go down with the ship every bank that isn’t considered too big to fail will see all their uninsured deposits start moving out. Many of them won’t be able to meet their liquidity needs as a result and go into receivership. With every bank that goes into receivership the outflows will only accelerate. People will start to get worried about insured deposits as we hit the limits of what FDIC can cover and insured deposits will start to flow out and into systemically important banks as well, further accelerating the death spiral of all but the biggest banks. This isn’t some made up scenario, start asking people that have underinsured depositors about their money movement plans.
- JumpCrisscross 4y ago> every bank that isn’t considered too big to fail will see all their uninsured deposits start moving out Small banks usually had to pay more for deposits and run conservative books for this reason.