Capital Markets School - October 2023

Internal Use Only

Deposit Mix

• Increases in NMD and increases in Surge Deposits resulted in large amounts of low cost or no cost deposit products  Great for bank’s Interest Expense

• The departure of Surge Deposits is a definite funding risk for the bank

• However, if the Surge Deposits stay but migrate to a different product, the bank realizes an immediate increase in Interest Expense without gaining additional funding

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Internal Use Only

Deposit Decay

Federal Deposit Insurance Corporation

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