do retail banks trade savings deposits?

Martinghoul · Dec 3, 2009, 10:57am

After all the sturm und drang, it's steady as she blows...

gooseman · Dec 3, 2009, 10:59am

yep. gamma-tastic.

Johnny B. Goode · Feb 17, 2010, 7:50am

[QUOTE=Martinghoul;994504]It's clear from the table that they are simply trying to encourage you to invest in particular terms (i.e. they want 4M and 8M terms, but don't want 5M and 6M). This could be due to the current structure of their deposit book (i.e. it smooths their duration profile). /QUOTE]

This is absolutely the correct answer. They are trying to avoid concentration of maturities in their term deposit book. The question that should be asked is whether or not such high rates on retail deposits make sense given where the wholesale bank bill market is.

Dec 3, 2009, 10:57am	#17
Martinghoul Legendary Member Member Since Feb 2009 2,456 Posts	Re: do retail banks trade savings deposits? After all the sturm und drang, it's steady as she blows... __________________ "Insofar as I may be heard by anything, which may or may not care what I say, I ask, if it matters, that you be forgiven for anything you may have done or failed to do which requires forgiveness."

Dec 3, 2009, 10:59am	#18
gooseman Legendary Member Member Since Feb 2008 1,809 Posts	Re: do retail banks trade savings deposits? yep. gamma-tastic.

Feb 17, 2010, 7:50am	#19
Johnny B. Goode Rookie Member Member Since Oct 2003 5 Posts	Re: do retail banks trade savings deposits? [QUOTE=Martinghoul;994504]It's clear from the table that they are simply trying to encourage you to invest in particular terms (i.e. they want 4M and 8M terms, but don't want 5M and 6M). This could be due to the current structure of their deposit book (i.e. it smooths their duration profile). /QUOTE] This is absolutely the correct answer. They are trying to avoid concentration of maturities in their term deposit book. The question that should be asked is whether or not such high rates on retail deposits make sense given where the wholesale bank bill market is.

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