5 min readFollowing the collapse of Silicon Valley Bank, Signature Bank, and the sale of First Republic, there’s been an increasing interest by regulators to reform the US deposit insurance scheme to fully protect the banking system from future bank runs. The Perfect Storm for Bank Runs Panic among deposit holders lit the initial spark that led…
2 min readIntroduction The single biggest credit risk for institutional cash investors lies in the large uninsured deposits they leave at their operating banks. Particularly at risk are uninsured balances at banks with less diversified business profiles and aggressive risk cultures that expose depositors to the risk of a bank run, which is difficult to predict and…
1 min readAbstract This introductory product brief discusses insured deposit programs’ potential safety, liquidity, yield, diversification and ease of use benefits. It also cautions on their servicer risk, liquidity, size restrictions, risks related to FDIC payoffs and sustainability. Such vehicles may be well suited for moderate-sized accounts with government mandate that desire higher yield potential than government…
2 min readIntroduction One short year ago, we discussed three key trends for 2011: low interest rates, a spreading sovereign debt crisis and persistent financial regulation. And we started our 2011 commentary with the phrase, “meet the New Year, same as the old.” Have we caught you in a moment of déjà vu? For 2012, we see…
2 min readExecutive Summary As risk averse cash investors slowly move away from an aggressively conservative strategy, we take a look at two developing trends that investors may be considering and some potential pitfalls. Emerging Trends: Bank Deposit Accounts Prime Money Market Funds We think that the credit market has probably exited the free-fall phase and has…
3 min readIn light of this week’s failed vote on the Troubled Asset Relief Program (TARP), we wanted to share some credit considerations with you. Companies may want to evaluate non-2a-7 bank money market deposit accounts (MMDA’s) with balances greater than $100,000, the FDIC coverage limit per bank (the FDIC insurance limit may increase to $250,000 if…