Primarily, the survey focused on four areas (governance, fund transfer pricing, customer pricing and deposit modelling) and banks’ varying approaches to dealing with them.
The worldwide banking environment has been subject to significant change in the six years since the start of the financial crisis. As a consequence, national and international authorities have started to apply new approaches with regard to regulatory activities and among others banks’ cost of liquidity has become an increasingly more important factor than previously was the case. This effect has been boosted, due to the regulators’ reaction to the financial crisis as witnessed by the Basel III Liquidity Coverage Ratio and Net Stable Funding Ratio. These Basel III regulations as well as their endorsement into EU law include favourable treatment for retail deposits. The overall importance of deposits as the most important funding sources for banks worldwide is ultimately reflected in banks’ balance sheets.
In view of these developments and the importance of deposits, we have conducted this survey of banks’ attitudes toward deposit modeling with the intention of determining and characterising best practices. Primarily, the survey focused on four areas (governance, fund transfer pricing, customer pricing and deposit modelling) and banks’ varying approaches to dealing with them.
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