US banks: funding pressure, yes. Liquidity crunch, no.

US banks are under pressure due to a sharp jump in interest rates, creating $620bn of unrealised losses on bond holdings. Bigger lenders can afford to shed some of the deposits they amassed during the pandemic.

March 12, 2023 . 3:37 AM

1 min read

SVB Financial, the biggest bank to fail since the 2008 financial crisis, is facing liquidity problems due to a high concentration of deposits in one industry.
US banks are under pressure to increase deposits due to a sharp jump in interest rates, creating $620bn of unrealised losses on bond holdings.
Bigger lenders such as JPMorgan and Bank of America can afford to shed some of the deposits they amassed during the pandemic.
Small and midsized banks can boost liquidity by offering higher-yielding certificates of deposits, cutting back on loan growth and borrowing from the Federal Home Loan Banks.