New Article Tackles Liquidity Management in a Changing World

April 4, 2019

With loan growth outpacing deposit growth the past few years—and competition around deposits heating up—banks need to understand their liquidity position and respond appropriately. That means taking stock, assessing the competition, identifying opportunities and then testing and monitoring the balance sheets. A new article from the forthcoming May/June issue of the ABA Banking Journal offers strategies on how to navigate this new world of liquidity.

Not only is liquidity a crucial issue from a funding standpoint—it’s also an area of focus for regulators “We’ve been seeing a lot of examiner comments on liquidity management,” says Joe Kennerson, managing director at Darling Consulting Group. “As on-balance sheet liquidity levels continue to decline, it’s going to pivot into all these strategy discussions,” he says. “How are we going to fund loan growth in 2019? What’s our deposit strategy? How aggressive are we going to have to be?”

The article also spotlights community bank strategies to handle liquidity challenges, including reciprocal deposits, creative deposit marketing, revisiting money market tier structures and dynamic liquidity forecasting. Read the article.

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