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tom a's avatar

I'm sure this is a bad question but why would "US banks are expanding loan books almost lock step in the decline in cash holdings (reserves)" reflect Fed tightening? Wouldn't US banks make less loans as rates go up?

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Dan's avatar

Thanks for pointing this out Meyrick. Traditionally the quarter end turn coincided with extra demand for funding ie Q3 2019. That no longer seems to be the case, at least in 2022. Do you think that’s a result of still being in an excess reserve position or a result of the changing nature of bank exposures as you highlight in your post? Thanks

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