Deposit Specialization and Lending Behavior

Kristian Blickle, Cecilia Parlatore () and Anthony Saunders
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Cecilia Parlatore: https://www.stern.nyu.edu/faculty/bio/cecilia-parlatore

No 1175, Staff Reports from Federal Reserve Bank of New York

Abstract: We examine how banks’ depositor composition shapes lending behavior, using granular supervisory data on deposits, loans, and securities for the largest U.S. banks. Classifying banks by depositor specialization, we find persistent differences in funding that translate to differences in asset allocations. Retail-depositor oriented banks hold longer-maturity loans and conduct more real estate lending, while corporate- and NBFI-oriented banks, whose funding is more volatile, hold shorter loans and liquid securities. Loan-level analyses show that stable funding is associated with lower rates, longer maturities, and larger loans. Growth in deposits is allocated differently depending on the depositor specialization of the bank, something we can explore using exogenous deposit growth during COVID.

Keywords: bank funding; lending; depositor flightiness; depositor structure; deposits; volatility; financial stability; lending decisions; loan terms (search for similar items in EconPapers)
JEL-codes: G01 G20 G21 (search for similar items in EconPapers)
Pages: 44
Date: 2025-12-01
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DOI: 10.59576/sr.1175

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