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Deposit Specialization and Lending Behavior

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Abstract

We examine how banks’ depositor composition shapes lending behavior, using granular supervisory data on deposits, loans, and securities for the largest U.S. banks. Classifying banks by depositor specialization, we find persistent differences in funding that translate to differences in asset allocations. Retail-depositor oriented banks hold longer-maturity loans and conduct more real estate lending, while corporate- and NBFI-oriented banks, whose funding is more volatile, hold shorter loans and liquid securities. Loan-level analyses show that stable funding is associated with lower rates, longer maturities, and larger loans. Growth in deposits is allocated differently depending on the depositor specialization of the bank, something we can explore using exogenous deposit growth during COVID.

Suggested Citation

  • Kristian S. Blickle & Cecilia Parlatore & Anthony Saunders, 2025. "Deposit Specialization and Lending Behavior," Staff Reports 1175, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:102272
    DOI: 10.59576/sr.1175
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G01 - Financial Economics - - General - - - Financial Crises

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