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Senior Financial Officer Survey

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November 2022 Senior Financial Officer Survey

Summary

Background

In November 2022, the Federal Reserve conducted a Senior Financial Officer Survey (SFOS) to gather views systematically from a number of banks on expectations for balance sheet management in the months ahead, preferred reserve levels, and their experiences and expectations for pass-through of the Federal Reserve policy rate to interest rates on deposits.

As in previous surveys, the November SFOS was distributed to 80 banks, representing a wide range of asset sizes and business models. The Federal Reserve distributed the survey to senior financial officers at these banks on November 4, 2022, with replies due by November 18, 2022. Responses were received from 80 banks, comprising 46 domestic banks and 34 foreign banking organizations (FBOs).1 The FBOs consisted of U.S. branches and agencies of foreign banks as well as one U.S. commercial bank that exhibited reserve management behavior more akin to this group than to similarly sized domestic banks.. In aggregate, respondents held a bit below three-fourths of total reserve balances in the banking system at the time of the survey.

Part 1: Questions about Reserves and Balance Sheet Management

(Questions 1–5)

The questions in Part 1 asked respondents about the strategy regarding their balance sheet and their expectations for changes to the level of liabilities and composition of assets.

  • Nearly one third of respondents reported that their bank plans to take actions intended to increase, or limit the decline in, the size of its balance sheet over the next six months. A similar number of respondents reported that their bank does not plan to take actions to increase or decrease the size of its balance sheet over that same period.2
  • More than half of the respondents reported that their bank expects its balance sheet size to remain roughly unchanged over the next six months.
  • For each of the liability categories, excluding respondents who reported N/A, at least a plurality of respondents indicated that their bank is not expecting the level of such liability to change over the next six months.
  • Among the asset categories, loans were most frequently cited as the asset type that respondents expected their banks to increase as a share of total assets over the next six months. This result was driven by respondents from domestic banks. The majority of respondents from foreign banks reported that their bank expects that loan levels as a share of total assets will remain roughly unchanged.
  • Roughly a quarter of respondents reported that their bank expects reserves to decrease as a share of total assets over the next six months, while the majority reported that their bank expects reserves to remain roughly unchanged as a share of total assets over that same period.

Part 2: Questions about Preferred Reserve Levels

(Questions 6–10)

The questions in Part 2 asked respondents about their bank's lowest comfortable level of reserves (LCLOR), which is defined in the survey as the lowest dollar level of reserves that their bank would feel comfortable holding before taking action to maintain or increase its reserve balances.

  • Factors that were most commonly cited as either very important or important in determining respondent's bank's LCLOR were satisfying liquidity-testing metrics, meeting projected liquidity outflows (under normal market conditions), and meeting routine intraday payment or settlement needs.
  • More than half of respondents from foreign banks reported that their bank's LCLOR has remained roughly the same size since the end of 2019. The majority of respondents from domestic banks reported that their bank's LCLOR had increased during this period; most of this group reported the change being an increase by more than 20 percent.
  • A large majority of respondents reported that their bank always prefers to hold additional reserves above their bank's LCLOR. Specific circumstances that were most commonly cited as very important or important for holding additional reserves were periods of greater-than-expected market volatility, periods of greater-than-expected stresses in funding markets, and periods of elevated risk of large deposit outflows.
  • When asked which actions their bank would take to increase reserves if their bank's reserve balances were expected to fall and remain below its LCLOR, respondents most commonly reported that they would borrow in unsecured funding markets, raise brokered deposits or brokered Certificate of Deposits (CDs), borrow in secured funding markets, and increase wholesale deposits by offering higher rates. A large majority of respondents from domestic banks also cited borrowing advances from Federal Home Loan Banks (FHLBs) as very likely or likely.

Part 3: Questions about Deposit Rates

(Questions 11–15)

The questions in Part 3 asked respondents about their bank's cumulative deposit betas from March to October of this year and their outlook for deposit betas over the next six months. For the purpose of this survey, "deposit beta" was defined as the basis point change in a banks average deposit rates on deposits with maturities of seven days or fewer relative to the basis point change in the target range for the federal funds rate.3

  • Looking back over the past six months, respondents most commonly indicated that retail deposit betas from March 2022 to October 2022 were under 10 percent. Respondents reported deposit betas for both wholesale operational deposits and wholesale non-operational deposits that were generally higher than for retail deposits and were more widely distributed.
  • When asked about the factors that affected their bank's deposit betas, concern about losing deposits due to competitive pressure was most commonly cited as very important or important for all three deposit types. For retail deposits, respondents also commonly cited a desire or plan to increase deposits as very important or important.
  • Looking ahead at the next six months, the respondent panel indicated a wider variation in expected deposit betas for retail and operational deposits, whereas non-operational deposits showed little signs of variation when compared to the responses in this survey that asked about deposit betas from March to October 2022. The factors that respondents reported that are likely to affect their bank's future deposit betas were little changed from the factors cited as affecting their bank's deposit betas over the previous six months.

This document was prepared by Courtney Demartini, Lyle Kumasaka, Matthew Malloy, Thomas Montgomery, and Nicole Trachman, Division of Monetary Affairs, Board of Governors of the Federal Reserve System; and Brian Gowen, Joshua Hall, Natalie Leonard, Jason Miu, Dante Turkow, and Leonard Wei, Federal Reserve Bank of New York.

Results

The following results include the instructions provided to the survey respondents. Components may not sum to totals because of rounding.

Part 1: Reserves and Balance Sheet Management

Questions 1 through 5 ask about your expectations for balance sheet management over the next six months. For context, the results of the September 2022 Survey of Primary Dealers showed cumulative median dealer expectations for the size of the Federal Reserve's holdings of U.S. Treasury securities and agency MBS to decrease by approximately $490 billion from the end of September 2022 to the end of March 2023. These projections would be consistent with a similar decline in the amount of Federal Reserve liabilities, including, but not limited to, reserve balances in the banking system and overnight reverse repo balances.

  1. Looking ahead to the next six months, which statement best characterizes your most likely strategy regarding your bank's balance sheet?

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    I. To take actions intended to decrease, or limit the growth in, the size of its balance sheet 8 10.0 3 6.5 5 14.7
    II.To take actions intended to maintain the current size of its balance sheet 17 21.3 10 21.7 7 20.6
    III. To take actions intended toincrease, or limit the decline in,the sizeof its balance sheet 26 32.5 22 47.8 4 11.8
    IV. Not to take specific actions to affect the size of its balance sheet 29 36.3 11 23.9 18 52.9
    Total 80 100.0 46 100.0 34 100.0
  2. If you responded to question 1 by selecting option I, II, or III, please describe the specific actions you expect to take to accomplish that strategy in the comment box below. If you selected option IV, please skip to question 3.

Fifty-one respondents provided substantive comments. Most comments were in line with or elaborated on the survey response. Some respondents provided more context for their bank's planned actions, but these comments did not have common themes.

  1. Looking ahead to the next six months, which statement best characterizes your expectation for the size of your bank's balance sheet? My bank expects its balance sheet to:

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    I. Decrease 8 10.0 4 8.7 4 11.8
    II. Remain roughly the same size (plus or minus 2 percent) 47 58.8 24 52.2 23 67.6
    III. Increase 25 31.3 18 39.1 7 20.6
    Total 80 100.0 46 100.0 34 100.0

  2. Question 4 asks about changes to the projected level of different liabilities on your bank's balance sheet. For each of the liability categories listed, please indicate your expectation about the potential change in the average level during October 2022 compared to the average level during April 2023 in the context of your previous responses. My bank expects the level will:

    1. Retail Deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 2 2.5 1 2.2 1 2.9
      II. Decrease more than 2 percent and less than or equal to 5 percent 4 5.0 4 8.7 0 0.0
      III. Remain roughly unchanged (plus or minus 2 percent) 23 28.7 20 43.5 3 8.8
      IV. Increase more than 2 percent and less than or equal to 5 percent 14 17.5 13 28.3 1 2.9
      V. Increase more than 5 percent 7 8.8 7 15.2 0 0.0
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 30 37.5 1 2.2 29 85.3
      Total 80 100.0 46 100.0 34 100.0

    2. Wholesale operational deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 1 1.3 1 2.2 0 0.0
      II. Decrease more than 2 percent and less than or equal to 5 percent 8 10.0 7 15.2 1 2.9
      III. Remain roughly unchanged (plus or minus 2 percent) 31 38.8 22 47.8 9 26.5
      IV. Increase more than 2 percent and less than or equal to 5 percent 9 11.3 5 10.9 4 11.8
      V. Increase more than 5 percent 4 5.0 2 4.3 2 5.9
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 27 33.8 9 19.6 18 52.9
      Total 80 100.0 46 100.0 34 100.0

    3. Wholesale non-operational deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 3 3.8 3 6.5 0 0.0
      II. Decrease more than 2 percent and less than or equal to 5 percent 10 12.5 9 19.6 1 2.9
      III. Remain roughly unchanged (plus or minus 2 percent) 40 50.0 17 37.0 23 67.6
      IV. Increase more than 2 percent and less than or equal to 5 percent 7 8.8 4 8.7 3 8.8
      V. Increase more than 5 percent 9 11.3 5 10.9 4 11.8
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 11 13.8 8 17.4 3 8.8
      Total 80 100.0 46 100.0 34 100.0

    4. FHLB advances ("N/A" for banks that are not FHLB members)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 6 7.5 6 13.0 0 0.0
      II. Decrease more than 2 percent and less than or equal to 5 percent 2 2.5 2 4.3 0 0.0
      III. Remain roughly unchanged (plus or minus 2 percent) 17 21.3 16 34.8 1 2.9
      IV. Increase more than 2 percent and less than or equal to 5 percent 7 8.8 7 15.2 0 0.0
      V. Increase more than 5 percent 12 15.0 12 26.1 0 0.0
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 36 45.0 3 6.5 33 97.1
      Total 80 100.0 46 100.0 34 100.0

    5. Other short-term wholesale funding liabilities (for example, negotiable certificates of deposit or commercial paper)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 9 11.3 6 13.0 3 8.8
      II. Decrease more than 2 percent and less than or equal to 5 percent 2 2.5 2 4.3 0 0.0
      III. Remain roughly unchanged (plus or minus 2 percent) 37 46.3 16 34.8 21 61.8
      IV. Increase more than 2 percent and less than or equal to 5 percent 11 13.8 5 10.9 6 17.6
      V. Increase more than 5 percent 19 23.8 15 32.6 4 11.8
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 2 2.5 2 4.3 0 0.0
      Total 80 100.0 46 100.0 34 100.0

    6. Short-term repo

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 1 1.3 1 2.2 0 0.0
      II. Decrease more than 2 percent and less than or equal to 5 percent 2 2.5 1 2.2 1 2.9
      III. Remain roughly unchanged (plus or minus 2 percent) 44 55.0 22 47.8 22 64.7
      IV. Increase more than 2 percent and less than or equal to 5 percent 5 6.3 3 6.5 2 5.9
      V. Increase more than 5 percent 6 7.5 5 10.9 1 2.9
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 22 27.5 14 30.4 8 23.5
      Total 80 100.0 46 100.0 34 100.0

    7. Other liabilities

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease more than 5 percent 2 2.5 1 2.2 1 2.9
      II. Decrease more than 2 percent and less than or equal to 5 percent 1 1.3 1 2.2 0 0.0
      III. Remain roughly unchanged (plus or minus 2 percent) 56 70.9 33 73.3 23 67.6
      IV. Increase more than 2 percent and less than or equal to 5 percent 2 2.5 1 2.2 1 2.9
      V. Increase more than 5 percent 8 10.1 6 13.3 2 5.9
      VI. N/A (please select if your bank's balance sheet does not include the liability category) 10 12.7 3 6.7 7 20.6
      Total 79 100.0 45 100.0 34 100.0

  3. Question 5 asks about changes to the composition of assets on your bank's balance sheet. Given the expected change in the size of your balance sheet noted in your previous responses, for each of the asset categories listed below, please indicate your expectation about the change in each asset category's average share of total assets during October 2022 compared to the average share during April 2023. My bank expects that this asset's share of total assets will:

    1. Reserves

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease 21 26.3 14 30.4 7 20.6
      II. Remain roughly unchanged (plus or minus 2 percentage points) 57 71.3 30 65.2 27 79.4
      III. Increase 2 2.5 2 4.3 0 0.0
      Total 80 100.0 46 100.0 34 100.0

    2. Level 1 Securities

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease 6 7.5 6 13.0 0 0.0
      II. Remain roughly unchanged (plus or minus 2 percentage points) 52 65.0 26 56.5 26 76.5
      III. Increase 20 25.0 14 30.4 6 17.6
      IV. N/A (please select if your bank's balance sheet does not include the asset category) 2 2.5 0 0.0 2 5.9
      Total 80 100.0 46 100.0 34 100.0

    3. Level 2 HQLA

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease 14 17.5 14 30.4 0 0.0
      II. Remain roughly unchanged (plus or minus 2 percentage points) 47 58.8 25 54.3 22 64.7
      III. Increase 9 11.3 6 13.0 3 8.8
      IV. N/A (please select if your bank's balance sheet does not include the asset category) 10 12.5 1 2.2 9 26.5
      Total 80 100.0 46 100.0 34 100.0

    4. Other Securities

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease 11 13.8 10 21.7 1 2.9
      II. Remain roughly unchanged (plus or minus 2 percentage points) 50 62.5 29 63.0 21 61.8
      III. Increase 2 2.5 1 2.2 1 2.9
      IV. N/A (please select if your bank's balance sheet does not include the asset category) 17 21.3 6 13.0 11 32.4
      Total 80 100.0 46 100.0 34 100.0

    5. Loans

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease 4 5.0 2 4.3 2 5.9
      II. Remain roughly unchanged (plus or minus 2 percentage points) 35 43.8 13 28.3 22 64.7
      III. Increase 40 50.0 31 67.4 9 26.5
      IV. N/A (please select if your bank's balance sheet does not include the asset category) 1 1.3 0 0.0 1 2.9
      Total 80 100.0 46 100.0 34 100.0

    6. Other Assets

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Decrease 5 6.3 4 8.7 1 2.9
      II. Remain roughly unchanged (plus or minus 2 percentage points) 64 80.0 37 80.4 27 79.4
      III. Increase 4 5.0 4 8.7 0 0.0
      IV. N/A (please select if your bank's balance sheet does not include the asset category) 7 8.8 1 2.2 6 17.6
      Total 80 100.0 46 100.0 34 100.0

Part 2: Questions about Preferred Reserve Levels

Questions 6 through 10 ask about your bank's lowest comfortable level of reserves (LCLOR) — the lowest dollar level of reserve balances your bank would feel comfortable holding before it takes action to maintain or increase its reserve balances. "Taking action" is defined as taking active steps to intervene and raise funding in the market to replenish reserves. Examples of active steps could include, but are not limited to, borrowing in the fed funds or other wholesale funding markets or bidding more aggressively in those markets, reducing holdings of other liquid assets, or raising deposit rates.

  1. Please rate on a scale from 1 (not important) to 5 (very important), the factors that determine your bank's LCLOR.

    1. Satisfying liquidity stress-testing metrics (meeting projected outflows under stressed market conditions)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 4 5.0 3 6.5 1 2.9
      2 3 3.8 2 4.3 1 2.9
      3 7 8.8 5 10.9 2 5.9
      4 13 16.3 9 19.6 4 11.8
      5 (Very important) 53 66.3 27 58.7 26 76.5
      Total 80 100.0 46 100.0 34 100.0

    2. Capacity to access liquidity in the market using non-reserve HQLA or other securities

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 12 15.0 3 6.5 9 26.5
      2 10 12.5 6 13.0 4 11.8
      3 23 28.7 15 32.6 8 23.5
      4 19 23.8 13 28.3 6 17.6
      5 (Very important) 16 20.0 9 19.6 7 20.6
      Total 80 100.0 46 100.0 34 100.0

    3. Capacity to access liquidity through Federal Reserve facilities like the Standing Repo Facility (SRF) or discount window

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 35 44.3 19 42.2 16 47.1
      2 23 29.1 11 24.4 12 35.3
      3 11 13.9 9 20.0 2 5.9
      4 6 7.6 5 11.1 1 2.9
      5 (Very important) 4 5.1 1 2.2 3 8.8
      Total 79 100.0 45 100.0 34 100.0

    4. Broader market conditions (e.g.level of volatility or stress) that could affect the value of non-reserve HQLA, margin requirements, or other needs

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 12 15.0 6 13.0 6 17.6
      2 10 12.5 5 10.9 5 14.7
      3 26 32.5 14 30.4 12 35.3
      4 20 25.0 13 28.3 7 20.6
      5 (Very important) 12 15.0 8 17.4 4 11.8
      Total 80 100.0 46 100.0 34 100.0

    5. Amount of less-stable deposits as a portion of total liabilities

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 16 20.3 3 6.5 13 39.4
      2 11 13.9 9 19.6 2 6.1
      3 24 30.4 15 32.6 9 27.3
      4 20 25.3 12 26.1 8 24.2
      5 (Very important) 8 10.1 7 15.2 1 3.0
      Total 79 100.0 46 100.0 33 100.0

    6. Amount of less-stable or shorter-term wholesale liabilities (excluding deposits) as a portion of total liabilities

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 19 24.7 8 18.2 11 33.3
      2 14 18.2 9 20.5 5 15.2
      3 21 27.3 13 29.5 8 24.2
      4 15 19.5 9 20.5 6 18.2
      5 (Very important) 8 10.4 5 11.4 3 9.1
      Total 77 100.0 44 100.0 33 100.0

    7. Meeting projected liquidity outflows over a certain window (more than one business day and under normal market conditions)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 5 6.3 1 2.2 4 11.8
      2 13 16.3 9 19.6 4 11.8
      3 9 11.3 6 13.0 3 8.8
      4 24 30.0 13 28.3 11 32.4
      5 (Very important) 29 36.3 17 37.0 12 35.3
      Total 80 100.0 46 100.0 34 100.0

    8. Meeting routine intraday payment or settlement needs

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 8 10.0 1 2.2 7 20.6
      2 11 13.8 11 23.9 0 0.0
      3 17 21.3 9 19.6 8 23.5
      4 12 15.0 8 17.4 4 11.8
      5 (Very important) 32 40.0 17 37.0 15 44.1
      Total 80 100.0 46 100.0 34 100.0

    9. Relative rate of return between reserves and non-reserve HQLA

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 15 18.8 8 17.4 7 20.6
      2 27 33.8 15 32.6 12 35.3
      3 32 40.0 19 41.3 13 38.2
      4 4 5.0 3 6.5 1 2.9
      5 (Very important) 2 2.5 1 2.2 1 2.9
      Total 80 100.0 46 100.0 34 100.0

    10. Relative rate of return between reserves and other investable assets (loans, non-HQLA securities, etc.)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 27 34.2 15 32.6 12 36.4
      2 28 35.4 14 30.4 14 42.4
      3 17 21.5 13 28.3 4 12.1
      4 4 5.1 4 8.7 0 0.0
      5 (Very important) 3 3.8 0 0.0 3 9.1
      Total 79 100.0 46 100.0 33 100.0

    11. Lack of depth in late day funding markets

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 27 33.8 10 21.7 17 50.0
      2 10 12.5 5 10.9 5 14.7
      3 17 21.3 10 21.7 7 20.6
      4 17 21.3 14 30.4 3 8.8
      5 (Very important) 9 11.3 7 15.2 2 5.9
      Total 80 100.0 46 100.0 34 100.0

    12. Other (please use comment box)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 3 50.0 1 25.0 2 100.0
      2 0 0.0 0 0.0 0 0.0
      3 0 0.0 0 0.0 0 0.0
      4 1 16.7 1 25.0 0 0.0
      5 (Very important) 2 33.3 2 50.0 0 0.0
      Total 6 100.0 4 100.0 2 100.0

Fourteen respondents provided comments, excluding responses of N/A or that specified that there were no additional comments. Most comments were in line with or elaborated on the survey responses. Some respondents provided more context but these comments did not have common themes.

  1. How has your approximate LCLOR changed since the end of 2019?

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    I. Decreased by more than 20 percent 0 0.0 0 0.0 0 0.0
    II. Decreased by more than 5 percent and less than or equal to 20 percent 2 2.5 1 2.2 1 2.9
    III. Remained roughly the same size (plus or minus 5 percent) 35 43.8 14 30.4 21 61.8
    IV. Increased by more than 5 percent and less than or equal to 20 percent 18 22.5 12 26.1 6 17.6
    V. Increased by more than 20 percent 25 31.3 19 41.3 6 17.6
    Total 80 100.0 46 100.0 34 100.0

  2. Under which, if any, of the below circumstances would you be likely to prefer to hold additional reserves above your LCLOR? Please rate the likelihood, on a scale from 1 (not likely) to 5 (very likely), that, under the circumstances, you would prefer to hold additional reserves above your LCLOR. If desired, please provide any additional detail or clarifying information in the comment box.

    1. Periods of greater-than-expected market volatility

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 1 1.3 0 0.0 1 2.9
      2 10 12.5 5 10.9 5 14.7
      3 15 18.8 8 17.4 7 20.6
      4 28 35.0 17 37.0 11 32.4
      5 (Very important) 26 32.5 16 34.8 10 29.4
      Total 80 100.0 46 100.0 34 100.0

    2. Periods of increased counterparty credit concerns

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 15 18.8 11 23.9 4 11.8
      2 16 20.0 9 19.6 7 20.6
      3 24 30.0 13 28.3 11 32.4
      4 12 15.0 6 13.0 6 17.6
      5 (Very important) 13 16.3 7 15.2 6 17.6
      Total 80 100.0 46 100.0 34 100.0

    3. Periods of greater-than-expected stresses in funding markets

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 2 2.5 1 2.2 1 2.9
      2 4 5.0 0 0.0 4 11.8
      3 9 11.3 5 10.9 4 11.8
      4 27 33.8 20 43.5 7 20.6
      5 (Very important) 38 47.5 20 43.5 18 52.9
      Total 80 100.0 46 100.0 34 100.0

    4. Periods of scarce, or relatively scarcer, aggregate reserves

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 4 5.0 2 4.3 2 5.9
      2 12 15.0 4 8.7 8 23.5
      3 32 40.0 17 37.0 15 44.1
      4 18 22.5 12 26.1 6 17.6
      5 (Very important) 14 17.5 11 23.9 3 8.8
      Total 80 100.0 46 100.0 34 100.0

    5. Periods of elevated risk of large deposit outflows

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 0 0.0 0 0.0 0 0.0
      2 5 6.3 0 0.0 5 15.2
      3 12 15.2 4 8.7 8 24.2
      4 25 31.6 15 32.6 10 30.3
      5 (Very important) 37 46.8 27 58.7 10 30.3
      Total 79 100.0 46 100.0 33 100.0

    6. Periods of elevated risk of large non-deposit liability outflows

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 11 13.8 6 13.0 5 14.7
      2 18 22.5 12 26.1 6 17.6
      3 15 18.8 9 19.6 6 17.6
      4 23 28.7 14 30.4 9 26.5
      5 (Very important) 13 16.3 5 10.9 8 23.5
      Total 80 100.0 46 100.0 34 100.0

    7. Periods where the relative rate of return between reserves and non-reserve HQLA becomes more attractive

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 11 13.8 6 13.0 5 14.7
      2 23 28.7 12 26.1 11 32.4
      3 28 35.0 18 39.1 10 29.4
      4 9 11.3 3 6.5 6 17.6
      5 (Very important) 9 11.3 7 15.2 2 5.9
      Total 80 100.0 46 100.0 34 100.0

    8. Periods where the relative rate of return between reserves and other investable assets (loans, non-HQLA securities, etc.) becomes more attractive

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 22 27.5 12 26.1 10 29.4
      2 24 30.0 13 28.3 11 32.4
      3 19 23.8 14 30.4 5 14.7
      4 8 10.0 3 6.5 5 14.7
      5 (Very important) 7 8.8 4 8.7 3 8.8
      Total 80 100.0 46 100.0 34 100.0

    9. My bank always holds additional reserves (please select 1 = No or 5 = Yes and explain in the comment box)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 17 21.3 14 30.4 3 8.8
      2 0 0.0 0 0.0 0 0.0
      3 0 0.0 0 0.0 0 0.0
      4 0 0.0 0 0.0 0 0.0
      5 (Very important) 63 78.8 32 69.6 31 91.2
      Total 80 100.0 46 100.0 34 100.0

    10. Other (please use comment box)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not important) 13 81.3 2 50.0 11 91.7
      2 0 0.0 0 0.0 0 0.0
      3 2 12.5 2 50.0 0 0.0
      4 0 0.0 0 0.0 0 0.0
      5 (Very important) 1 6.3 0 0.0 1 8.3
      Total 16 100.0 4 100.0 12 100.0

Sixty-one respondents provided substantive comments. Most comments were in line with or elaborated on the survey responses, with most respondents reiterating that their bank always holds additional reserves.

  1. If your bank's reserve balances fell below, or were expected to fall and remain below, your LCLOR, please rate the likelihood on a scale from 1 (not likely) to 5 (very likely) that your bank would take each of the following actions to increase or maintain its reserve balances:

    1. Borrow in unsecured funding markets (e.g.federal funds, Eurodollars, CP, and CDs)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 6 7.6 4 8.9 2 5.9
      2 2 2.5 2 4.4 0 0.0
      3 9 11.4 7 15.6 2 5.9
      4 15 19.0 8 17.8 7 20.6
      5 (Very Likely) 47 59.5 24 53.3 23 67.6
      Total 79 100.0 45 100.0 34 100.0

    2. Borrow in secured funding markets (repurchase agreements)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 10 13.2 6 13.0 4 13.3
      2 17 22.4 10 21.7 7 23.3
      3 13 17.1 8 17.4 5 16.7
      4 13 17.1 8 17.4 5 16.7
      5 (Very Likely) 23 30.3 14 30.4 9 30.0
      Total 76 100.0 46 100.0 30 100.0

    3. Borrow from the discount window

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 63 78.8 34 73.9 29 85.3
      2 8 10.0 6 13.0 2 5.9
      3 8 10.0 6 13.0 2 5.9
      4 1 1.3 0 0.0 1 2.9
      5 (Very Likely) 0 0.0 0 0.0 0 0.0
      Total 80 100.0 46 100.0 34 100.0

    4. Use the SRF (N/A for banks that are not SRF counterparties)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 7 36.8 4 44.4 3 30.0
      2 8 42.1 5 55.6 3 30.0
      3 2 10.5 0 0.0 2 20.0
      4 0 0.0 0 0.0 0 0.0
      5 (Very Likely) 2 10.5 0 0.0 2 20.0
      Total 19 100.0 9 100.0 10 100.0

    5. Borrow advances from FHLBs (N/A for banks that are non-members)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 1 2.3 1 2.3 0 0.0
      2 0 0.0 0 0.0 0 0.0
      3 3 6.8 3 7.0 0 0.0
      4 6 13.6 6 14.0 0 0.0
      5 (Very Likely) 34 77.3 33 76.7 1 100.0
      Total 44 100.0 43 100.0 1 100.0

    6. Raise brokered deposits or brokered CDs

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 9 12.7 0 0.0 9 36.0
      2 3 4.2 3 6.5 0 0.0
      3 13 18.3 7 15.2 6 24.0
      4 16 22.5 13 28.3 3 12.0
      5 (Very Likely) 30 42.3 23 50.0 7 28.0
      Total 71 100.0 46 100.0 25 100.0

    7. Reduce lending in short-term money markets (for example, reverse repurchase agreements)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 20 32.3 11 33.3 9 31.0
      2 6 9.7 5 15.2 1 3.4
      3 12 19.4 7 21.2 5 17.2
      4 7 11.3 3 9.1 4 13.8
      5 (Very Likely) 17 27.4 7 21.2 10 34.5
      Total 62 100.0 33 100.0 29 100.0

    8. Monetize HQLA or sell available-for-sale securities holdings

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 22 27.8 11 23.9 11 33.3
      2 20 25.3 13 28.3 7 21.2
      3 21 26.6 9 19.6 12 36.4
      4 9 11.4 8 17.4 1 3.0
      5 (Very Likely) 7 8.9 5 10.9 2 6.1
      Total 79 100.0 46 100.0 33 100.0

    9. Increase retail deposits by offering higher rates (N/A for banks that do not have retail deposits)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 3 5.9 3 6.7 0 0.0
      2 10 19.6 9 20.0 1 16.7
      3 17 33.3 14 31.1 3 50.0
      4 14 27.5 14 31.1 0 0.0
      5 (Very Likely) 7 13.7 5 11.1 2 33.3
      Total 51 100.0 45 100.0 6 100.0

    10. Increase retail deposits by offering more attractive, non-rate terms (N/A for banks that do not have retail deposits)

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 12 23.5 12 26.7 0 0.0
      2 12 23.5 11 24.4 1 16.7
      3 14 27.5 11 24.4 3 50.0
      4 9 17.6 9 20.0 0 0.0
      5 (Very Likely) 4 7.8 2 4.4 2 33.3
      Total 51 100.0 45 100.0 6 100.0

    11. Increase wholesale deposits by offering higher rates

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 6 8.3 4 10.0 2 6.3
      2 5 6.9 2 5.0 3 9.4
      3 17 23.6 9 22.5 8 25.0
      4 28 38.9 20 50.0 8 25.0
      5 (Very Likely) 16 22.2 5 12.5 11 34.4
      Total 72 100.0 40 100.0 32 100.0

    12. Increase wholesale deposits by offering more attractive, non-rate terms

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 21 30.0 9 22.5 12 40.0
      2 18 25.7 11 27.5 7 23.3
      3 17 24.3 11 27.5 6 20.0
      4 10 14.3 8 20.0 2 6.7
      5 (Very Likely) 4 5.7 1 2.5 3 10.0
      Total 70 100.0 40 100.0 30 100.0

    13. Use the FX swap market to swap non-U.S. dollar reserves for U.S. dollar reserves

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      1 (Not Likely) 21 38.9 13 59.1 8 25.0
      2 5 9.3 1 4.5 4 12.5
      3 11 20.4 5 22.7 6 18.8
      4 9 16.7 2 9.1 7 21.9
      5 (Very Likely) 8 14.8 1 4.5 7 21.9
      Total 54 100.0 22 100.0 32 100.0
    14. Other (please use comment box)

Twenty-two respondents provided comments, excluding responses of N/A or that specified that there were no additional comments. Most were in line with or elaborated on the survey responses but these comments did not have common themes.

  1. Please provide any other relevant information about your bank's preferred level of reserves.

Thirteen respondents provided substantive comments. Some respondents provided more context for their bank's LCLOR approach, but these comments did not have common themes.

Part 3: Questions about Deposit Rates

Questions 11 through 15 ask about deposit pricing strategies (in particular, the degree to which your bank passes through changes in the Federal Reserve policy rate to rates offered on deposits) and deposit balances. For the purpose of this section, deposit beta is defined as the basis point change in your bank's average deposit rates on deposits with maturities of 7 days or fewer relative to the basis point change in the target range for the federal funds rate.

  1. For each of the deposit categories below, please indicate your bank's cumulative deposit beta from March 2022 through the end of October 2022. For reference, the target range for the federal funds rate over this period increased 300 basis points. Please select one of the following options:

    1. Retail deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Less than or equal to 10 percent (i.e., your bank's average deposit rate increased between 0 and 30 basis points) 24 30.0 23 50.0 1 2.9
      II. Between 11 and 20 percent 7 8.8 5 10.9 2 5.9
      III. Between 21 and 40 percent 9 11.3 9 19.6 0 0.0
      IV. Between 41 and 60 percent 4 5.0 2 4.3 2 5.9
      V. Between 61 and 80 percent 4 5.0 4 8.7 0 0.0
      VI. Greater than 81 percent 2 2.5 2 4.3 0 0.0
      VII. N/A (please select if your bank's balance sheet does not include the deposit type) 30 37.5 1 2.2 29 85.3
      Total 80 100.0 46 100.0 34 100.0

    2. Wholesale operational deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Less than or equal to 10 percent (i.e., your bank's average deposit rate increased between 0 and 30 basis points) 7 8.9 5 11.1 2 5.9
      II. Between 11 and 20 percent 6 7.6 6 13.3 0 0.0
      III. Between 21 and 40 percent 9 11.4 9 20.0 0 0.0
      IV. Between 41 and 60 percent 11 13.9 9 20.0 2 5.9
      V. Between 61 and 80 percent 8 10.1 6 13.3 2 5.9
      VI. Greater than 81 percent 11 13.9 1 2.2 10 29.4
      VII. N/A (please select if your bank's balance sheet does not include the deposit type) 27 34.2 9 20.0 18 52.9
      Total 79 100.0 45 100.0 34 100.0

    3. Wholesale non-operational deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Less than or equal to 10 percent (i.e., your bank's average deposit rate increased between 0 and 30 basis points) 6 7.6 3 6.7 3 8.8
      II. Between 11 and 20 percent 2 2.5 2 4.4 0 0.0
      III. Between 21 and 40 percent 5 6.3 4 8.9 1 2.9
      IV. Between 41 and 60 percent 14 17.7 12 26.7 2 5.9
      V. Between 61 and 80 percent 13 16.5 10 22.2 3 8.8
      VI. Greater than 81 percent 27 34.2 6 13.3 21 61.8
      VII. N/A (please select if your bank's balance sheet does not include the deposit type) 12 15.2 8 17.8 4 11.8
      Total 79 100.0 45 100.0 34 100.0

  2. Looking back over the period from March 2022 through the end of October 2022, and given your response to question 11, please rate on a scale from 1 (not important) to 5 (very important) the factors that affected your bank's past deposit betas. Please select N/A if your bank's balance sheet does not include the deposit type.

    I. Retail

    a. Lack of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 16 32.0 15 33.3 1 20.0
    2 6 12.0 4 8.9 2 40.0
    3 8 16.0 6 13.3 2 40.0
    4 7 14.0 7 15.6 0 0.0
    5 (Very important) 13 26.0 13 28.9 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    b. Comfort with ability to retain deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 3 6.0 3 6.7 0 0.0
    2 11 22.0 9 20.0 2 40.0
    3 18 36.0 15 33.3 3 60.0
    4 12 24.0 12 26.7 0 0.0
    5 (Very important) 6 12.0 6 13.3 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    c. Comfort with losing deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 21 42.0 19 42.2 2 40.0
    2 12 24.0 11 24.4 1 20.0
    3 8 16.0 6 13.3 2 40.0
    4 7 14.0 7 15.6 0 0.0
    5 (Very important) 2 4.0 2 4.4 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    d. Desire or plan to reduce deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 39 79.6 36 81.8 3 60.0
    2 5 10.2 3 6.8 2 40.0
    3 4 8.2 4 9.1 0 0.0
    4 1 2.0 1 2.3 0 0.0
    5 (Very important) 0 0.0 0 0.0 0 0.0
    Total 49 100.0 44 100.0 5 100.0

    e. Concern about losing deposits due to competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 5 10.0 5 11.1 0 0.0
    2 6 12.0 6 13.3 0 0.0
    3 10 20.0 9 20.0 1 20.0
    4 14 28.0 10 22.2 4 80.0
    5 (Very important) 15 30.0 15 33.3 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    f. Desire or plan to increase deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 5 10.0 5 11.1 0 0.0
    2 7 14.0 7 15.6 0 0.0
    3 12 24.0 8 17.8 4 80.0
    4 11 22.0 10 22.2 1 20.0
    5 (Very important) 15 30.0 15 33.3 0 0.0
    Total 50 100.0 45 100.0 5 100.0

     

    II. Wholesale Operational

    a. Lack of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 16 30.8 10 27.8 6 37.5
    2 13 25.0 9 25.0 4 25.0
    3 11 21.2 5 13.9 6 37.5
    4 5 9.6 5 13.9 0 0.0
    5 (Very important) 7 13.5 7 19.4 0 0.0
    Total 52 100.0 36 100.0 16 100.0

    b. Comfort with ability to retain deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 7 13.5 3 8.3 4 25.0
    2 12 23.1 9 25.0 3 18.8
    3 19 36.5 13 36.1 6 37.5
    4 10 19.2 9 25.0 1 6.3
    5 (Very important) 4 7.7 2 5.6 2 12.5
    Total 52 100.0 36 100.0 16 100.0

    c. Comfort with losing deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 14 26.9 8 22.2 6 37.5
    2 17 32.7 11 30.6 6 37.5
    3 13 25.0 9 25.0 4 25.0
    4 6 11.5 6 16.7 0 0.0
    5 (Very important) 2 3.8 2 5.6 0 0.0
    Total 52 100.0 36 100.0 16 100.0

    d. Desire or plan to reduce deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 37 71.2 25 69.4 12 75.0
    2 6 11.5 4 11.1 2 12.5
    3 6 11.5 5 13.9 1 6.3
    4 3 5.8 2 5.6 1 6.3
    5 (Very important) 0 0.0 0 0.0 0 0.0
    Total 52 100.0 36 100.0 16 100.0

    e. Concern about losing deposits due to competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 1 1.9 1 2.8 0 0.0
    2 8 15.4 5 13.9 3 18.8
    3 16 30.8 14 38.9 2 12.5
    4 10 19.2 5 13.9 5 31.3
    5 (Very important) 17 32.7 11 30.6 6 37.5
    Total 52 100.0 36 100.0 16 100.0

    f. Desire or plan to increase deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 7 13.5 6 16.7 1 6.3
    2 6 11.5 3 8.3 3 18.8
    3 15 28.8 8 22.2 7 43.8
    4 10 19.2 9 25.0 1 6.3
    5 (Very important) 14 26.9 10 27.8 4 25.0
    Total 52 100.0 36 100.0 16 100.0

     

    III. Wholesale Non-operational

    a. Lack of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 25 37.9 14 37.8 11 37.9
    2 11 16.7 8 21.6 3 10.3
    3 15 22.7 4 10.8 11 37.9
    4 7 10.6 4 10.8 3 10.3
    5 (Very important) 8 12.1 7 18.9 1 3.4
    Total 66 100.0 37 100.0 29 100.0

    b. Comfort with ability to retain deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 14 21.2 7 18.9 7 24.1
    2 19 28.8 14 37.8 5 17.2
    3 18 27.3 8 21.6 10 34.5
    4 11 16.7 7 18.9 4 13.8
    5 (Very important) 4 6.1 1 2.7 3 10.3
    Total 66 100.0 37 100.0 29 100.0

    c. Comfort with losing deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 22 33.3 10 27.0 12 41.4
    2 16 24.2 6 16.2 10 34.5
    3 12 18.2 7 18.9 5 17.2
    4 10 15.2 10 27.0 0 0.0
    5 (Very important) 6 9.1 4 10.8 2 6.9
    Total 66 100.0 37 100.0 29 100.0

    d. Desire or plan to reduce deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 40 60.6 24 64.9 16 55.2
    2 12 18.2 4 10.8 8 27.6
    3 12 18.2 8 21.6 4 13.8
    4 2 3.0 1 2.7 1 3.4
    5 (Very important) 0 0.0 0 0.0 0 0.0
    Total 66 100.0 37 100.0 29 100.0

    e. Concern about losing deposits due to competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 3 4.5 2 5.4 1 3.4
    2 6 9.1 5 13.5 1 3.4
    3 16 24.2 9 24.3 7 24.1
    4 16 24.2 9 24.3 7 24.1
    5 (Very important) 25 37.9 12 32.4 13 44.8
    Total 66 100.0 37 100.0 29 100.0

    f. Desire or plan to increase deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 10 15.2 7 18.9 3 10.3
    2 7 10.6 4 10.8 3 10.3
    3 19 28.8 8 21.6 11 37.9
    4 14 21.2 9 24.3 5 17.2
    5 (Very important) 16 24.2 9 24.3 7 24.1
    Total 66 100.0 37 100.0 29 100.0

     

  3. Looking ahead six months to April 2023, for each of the deposit categories below, please select your expectations for your bank's cumulative deposit beta since March 2022.

    1. Retail deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Less than or equal to 10 percent (i.e., your bank's average deposit rate increased between 0 and 30 basis points) 6 7.6 5 10.9 1 3.0
      II. Between 11 and 20 percent 18 22.8 17 37.0 1 3.0
      III. Between 21 and 40 percent 15 19.0 14 30.4 1 3.0
      IV. Between 41 and 60 percent 3 3.8 1 2.2 2 6.1
      V. Between 61 and 80 percent 5 6.3 5 10.9 0 0.0
      VI. Greater than 81 percent 3 3.8 3 6.5 0 0.0
      VII. N/A (please select if your bank's balance sheet does not include the deposit type) 29 36.7 1 2.2 28 84.8
      Total 79 100.0 46 100.0 33 100.0

    2. Wholesale operational deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Less than or equal to 10 percent (i.e., your bank's average deposit rate increased between 0 and 30 basis points) 3 3.8 1 2.2 2 6.1
      II. Between 11 and 20 percent 3 3.8 3 6.7 0 0.0
      III. Between 21 and 40 percent 14 17.9 14 31.1 0 0.0
      IV. Between 41 and 60 percent 8 10.3 6 13.3 2 6.1
      V. Between 61 and 80 percent 12 15.4 11 24.4 1 3.0
      VI. Greater than 81 percent 12 15.4 1 2.2 11 33.3
      VII. N/A (please select if your bank's balance sheet does not include the deposit type) 26 33.3 9 20.0 17 51.5
      Total 78 100.0 45 100.0 33 100.0

    3. Wholesale non-operational deposits

        All respondents Domestic Foreign
      Banks Percent Banks Percent Banks Percent
      I. Less than or equal to 10 percent (i.e., your bank's average deposit rate increased between 0 and 30 basis points) 3 3.8 0 0.0 3 9.1
      III. Between 21 and 40 percent 7 9.0 7 15.6 0 0.0
      IV. Between 41 and 60 percent 8 10.3 6 13.3 2 6.1
      V. Between 61 and 80 percent 18 23.1 16 35.6 2 6.1
      VI. Greater than 81 percent 30 38.5 8 17.8 22 66.7
      VII. N/A (please select if your bank's balance sheet does not include the deposit type) 12 15.4 8 17.8 4 12.1
      Total 78 100.0 45 100.0 33 100.0

  4. Looking ahead to the next six months, and given your response to question 13, please rate on a scale from 1 (not important) to 5 (very important) the factors that are likely to affect your bank's future deposit betas. Please select N/A if your bank's balance sheet does not include the deposit type.

    I. Retail

    a. Lack of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 22 44.0 21 46.7 1 20.0
    2 4 8.0 3 6.7 1 20.0
    3 13 26.0 10 22.2 3 60.0
    4 5 10.0 5 11.1 0 0.0
    5 (Very important) 6 12.0 6 13.3 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    b. Comfort with ability to retain deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 7 14.0 7 15.6 0 0.0
    2 12 24.0 10 22.2 2 40.0
    3 15 30.0 12 26.7 3 60.0
    4 9 18.0 9 20.0 0 0.0
    5 (Very important) 7 14.0 7 15.6 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    c. Comfort with losing deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 26 52.0 24 53.3 2 40.0
    2 9 18.0 8 17.8 1 20.0
    3 10 20.0 8 17.8 2 40.0
    4 4 8.0 4 8.9 0 0.0
    5 (Very important) 1 2.0 1 2.2 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    d. Desire or plan to reduce deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 43 87.8 40 90.9 3 60.0
    2 4 8.2 2 4.5 2 40.0
    3 2 4.1 2 4.5 0 0.0
    4 0 0.0 0 0.0 0 0.0
    5 (Very important) 0 0.0 0 0.0 0 0.0
    Total 49 100.0 44 100.0 5 100.0

    e. Concern about losing deposits due to competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 1 2.0 1 2.2 0 0.0
    2 4 8.0 4 8.9 0 0.0
    3 9 18.0 8 17.8 1 20.0
    4 17 34.0 13 28.9 4 80.0
    5 (Very important) 19 38.0 19 42.2 0 0.0
    Total 50 100.0 45 100.0 5 100.0

    f. Desire or plan to increase deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 4 8.0 4 8.9 0 0.0
    2 2 4.0 2 4.4 0 0.0
    3 15 30.0 11 24.4 4 80.0
    4 11 22.0 10 22.2 1 20.0
    5 (Very important) 18 36.0 18 40.0 0 0.0
    Total 50 100.0 45 100.0 5 100.0

     

    II. Wholesale Operational

    a. Lack of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 24 46.2 18 50.0 6 37.5
    2 8 15.4 5 13.9 3 18.8
    3 12 23.1 5 13.9 7 43.8
    4 3 5.8 3 8.3 0 0.0
    5 (Very important) 5 9.6 5 13.9 0 0.0
    Total 52 100.0 36 100.0 16 100.0

    b. Comfort with ability to retain deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 9 17.3 5 13.9 4 25.0
    2 10 19.2 8 22.2 2 12.5
    3 19 36.5 12 33.3 7 43.8
    4 7 13.5 6 16.7 1 6.3
    5 (Very important) 7 13.5 5 13.9 2 12.5
    Total 52 100.0 36 100.0 16 100.0

    c. Comfort with losing deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 22 42.3 16 44.4 6 37.5
    2 12 23.1 7 19.4 5 31.3
    3 14 26.9 9 25.0 5 31.3
    4 2 3.8 2 5.6 0 0.0
    5 (Very important) 2 3.8 2 5.6 0 0.0
    Total 52 100.0 36 100.0 16 100.0

    d. Desire or plan to reduce deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 42 80.8 30 83.3 12 75.0
    2 3 5.8 2 5.6 1 6.3
    3 5 9.6 3 8.3 2 12.5
    4 2 3.8 1 2.8 1 6.3
    5 (Very important) 0 0.0 0 0.0 0 0.0
    Total 52 100.0 36 100.0 16 100.0

    e. Concern about losing deposits due to competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 0 0.0 0 0.0 0 0.0
    2 4 7.7 1 2.8 3 18.8
    3 10 19.2 7 19.4 3 18.8
    4 18 34.6 14 38.9 4 25.0
    5 (Very important) 20 38.5 14 38.9 6 37.5
    Total 52 100.0 36 100.0 16 100.0

    f. Desire or plan to increase deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 5 9.6 4 11.1 1 6.3
    2 3 5.8 1 2.8 2 12.5
    3 15 28.8 7 19.4 8 50.0
    4 12 23.1 11 30.6 1 6.3
    5 (Very important) 17 32.7 13 36.1 4 25.0
    Total 52 100.0 36 100.0 16 100.0

     

    III. Wholesale Non-operational

    a. Lack of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 33 50.0 22 59.5 11 37.9
    2 6 9.1 3 8.1 3 10.3
    3 15 22.7 3 8.1 12 41.4
    4 6 9.1 4 10.8 2 6.9
    5 (Very important) 6 9.1 5 13.5 1 3.4
    Total 66 100.0 37 100.0 29 100.0

    b. Comfort with ability to retain deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 18 27.3 10 27.0 8 27.6
    2 14 21.2 10 27.0 4 13.8
    3 20 30.3 9 24.3 11 37.9
    4 7 10.6 4 10.8 3 10.3
    5 (Very important) 7 10.6 4 10.8 3 10.3
    Total 66 100.0 37 100.0 29 100.0

    c. Comfort with losing deposits, regardless of competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 28 42.4 15 40.5 13 44.8
    2 14 21.2 5 13.5 9 31.0
    3 14 21.2 9 24.3 5 17.2
    4 5 7.6 5 13.5 0 0.0
    5 (Very important) 5 7.6 3 8.1 2 6.9
    Total 66 100.0 37 100.0 29 100.0

    d. Desire or plan to reduce deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 43 65.2 28 75.7 15 51.7
    2 10 15.2 3 8.1 7 24.1
    3 12 18.2 6 16.2 6 20.7
    4 1 1.5 0 0.0 1 3.4
    5 (Very important) 0 0.0 0 0.0 0 0.0
    Total 66 100.0 37 100.0 29 100.0

    e. Concern about losing deposits due to competitive pressure on deposit rates

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 2 3.0 1 2.7 1 3.4
    2 6 9.1 5 13.5 1 3.4
    3 12 18.2 7 18.9 5 17.2
    4 21 31.8 11 29.7 10 34.5
    5 (Very important) 25 37.9 13 35.1 12 41.4
    Total 66 100.0 37 100.0 29 100.0

    f. Desire or plan to increase deposits

      All respondents Domestic Foreign
    Banks Percent Banks Percent Banks Percent
    1 (Not important) 8 12.1 5 13.5 3 10.3
    2 5 7.6 2 5.4 3 10.3
    3 21 31.8 11 29.7 10 34.5
    4 15 22.7 8 21.6 7 24.1
    5 (Very important) 17 25.8 11 29.7 6 20.7
    Total 66 100.0 37 100.0 29 100.0
  5. Please provide any other information relevant to your bank's deposit pricing strategy or deposit forecast in the comment box below.

Thirty-five respondents provided substantive comments. Many respondents, in line with their survey responses, provided more context about remaining competitive. Beyond this, there were no other common themes in the written comments.

Footnotes

 1. The FBOs consisted of U.S. branches and agencies of foreign banks as well as one U.S. commercial bank that exhibited reserve management behavior more akin to this group than to similarly sized domestic banks. Return to text

 2. The survey asked respondents to consider the differences between average values in October 2022 and respondents' expectations for the average values in April 2023. Return to text

 3. For the purpose of this survey, "deposit beta" was defined as the basis point change in a bank's average deposit rates on deposits with maturities of seven days or fewer relative to the basis point change in the target range for the federal funds rate. Return to text

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Last Update: January 23, 2023