Forecasting a recession for a bank is key in determining the loan loss provision (predicting loan loss over the life of the loan) under CELA. As an example, JP Morgan Chase & Co, the biggest bank in the US, is setting aside more than $1 billion in preparation for potential…
Brokered CDs Reaching Modest New Highs in 2024 and 2025 IDC Financial Publishing (IDCFP) has attempted over time to estimate brokered CDs for individual banks. The unknown in the equation has historically been the level of sweep accounts in brokered deposits. As of September 30, 2021, bank reports, sweep accounts for individual…
Credit unions have grown to become a major factor in the U.S. economy, with assets that have grown at nearly twice the pace of banks over the past decade. Credit unions are owned by their members and are designed to offer lower borrowing costs and higher deposit rates. In addition,…
Brokered CDs Reaching New Highs in 2024 and 2025 Deposit costs at banks reflect competition from yields on the 3-month T-Bill of 5.6%, and the 2-year at 5.1%, coupled with the upward pressure of another likely hike in the Fed funds rate this year. Together, these yields forecast rising deposit costs…
Even banks with long track records of good management and growing net worth can very quickly reverse direction, and spin out into a value-destroying mode of operation...especially during times of economic stress. Too often, much damage is done before management recognizes that it has a problem, is able to diagnose its…
