A new analysis of market rates Insight (MRI, www.marketratesinsight.com), the leading research firm that tracks rates for deposits, loans and fees to financial institutions, found that the level of FDIC deposit insurance fund (DIF) balance is substantial and significant impact on average interest rates for bank deposit products. When the DIF balance was higher average APY was higher and deposit rates fell along with balance in DIF.
In the first quarter of 2007, when the balance of the insurance fund, the FDIC had about $ 50 billion, the national average interest rate for CDs and money market funds was 4.25 basis points. Today the FDIC insurance fund balance is about $ 10 billion, and the national average interest rate for CDs and money market is 1.77 bps. "It is clear that the FDIC insurance fund balance influences the interest rates of deposits," said Dr. Dan Geller, Executive Vice President at market rates Insight, "the fact that we don't know how prepaid replenishment of the Fund now being proposed will affect interest rates on deposits."
Recent research examines the linear relationship (regression) between DIF quarterly balance sheets and interest rates for CDs and mm during the past five years (2004 Q4 Q2 2009). The raw data for FDIC DIF residue was obtained from the FDIC's quarterly reports and raw data for national average APY for deposit products was derived from market rates insight database. he full analysis can be viewed on the Web site of the market Insight rates at this site: http://www.marketratesinsight.com/docs/FDICCausingRateCha ...
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For more than two decades of market rates Insight (MRI) helps subscribers Price accuracy, providing savings banks, credit unions and other financial institutions with the exact market for deposits, loans and fees. MRI uses deposit surveys, mortgage and consumer loan surveys, research, collection, scanned and Declaration, notification of new products and market share and money Fund intelligence reports to allow subscribers to a profitable response to new trends. MRI products include custom tools, market research, Web reporting, as well as a searchable online database, calibers, alerts, and dashboards that aggregate data key of the client to provide real-time views on how they stack up against competitors in the market.
Market rates Insight is located in San Anselmo, California. For more information, see www.marketratesinsight.com.
Contact:
Dr. Dan Geller
Market Insight rates
415-448-8813
Dan.Geller@MarketRatesInsight.com
Tom Wolfe
Market Insight rates
(415) 259-5638
Tom.Woolf@marketratesinsight.com