Banks Develop a Nonbank Footprint to Better Manage Liquidity Needs

Nicola Cetorelli and Saketh Prazad ()

No 20251118b, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In a previous post, we documented how, over the past five decades, the typical U.S. bank has evolved from an entity mainly focused on deposit taking and loan making to a more diversified conglomerate also incorporating a variety of nonbank activities. In this post, we show that an important driver of the evolution of this new organizational form is the desire of banks to efficiently manage liquidity needs.

Keywords: banks; nonbanks; nonbank financial institutions (NBFIs); NBFIs; non-bank financial intermediaries; liquidity; bank regulation (search for similar items in EconPapers)
JEL-codes: G01 G21 G23 G28 (search for similar items in EconPapers)
Date: 2025-11-18
New Economics Papers: this item is included in nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:102119

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DOI: 10.59576/lse.20251118b

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