Reciprocal Deposits and the Banking Turmoil of 2023

Edward Prescott and Grant Rosenberger

Economic Commentary, 2024, vol. 2024, issue 14, 12

Abstract: Reciprocal deposits are deposits exchanged between banks to effectively increase deposit insurance coverage. Their use grew significantly during the banking turmoil of 2023. This Economic Commentary describes what they are, their connection to brokered deposits, how their legal treatment has changed over time, and which banks use them the most. It also discusses longer-run trends in uninsured deposits.

Keywords: Financial crises; Bank regulation; Reciprocal deposits; Deposit insurance (search for similar items in EconPapers)
Date: 2024
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DOI: 10.26509/frbc-ec-202414

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