Research

Deposits and the March 2023 Banking Crisis–A Retrospective

Stephan Luck and Matthew Plosser, Federal Reserve Bank of New York (Liberty Street Economics) · 2024

The 2023 bank runs are a staple of banking and FIG interviews. This retrospective shows what actually happened to deposit pricing and funding afterwards, beyond the headlines about the failed banks.

• Banking
• Crises and market history

1 idea from this research

• Case studyBanking

  Deposit betas kept rising after March 2023, but the run did not change their path

  The 2023 runs redistributed deposits towards the largest banks and exposed a pricing gap that already existed; they did not reprice the system.

  Any question about the 2023 banking crisis, deposit flight or the funding advantage of the largest banks.