Brokered deposits are a quick and easy way banks can bolster their balance sheets in a pinch. Regulators are wary of banks that operate with high concentrations of brokered deposits, which are viewed as a sort of “hot" money. Other regional banks that ramped up their use of brokered deposits in the second quarter include Truist Financial and M&T Bank. The FDIC can charge higher insurance premiums on brokered deposits, and banks that fall below certain capital levels aren’t allowed to accept brokered deposits. Brokered and other time deposits made up 8.5% of total deposits in the second quarter, versus 7.2% in the first.

Source: Wall Street Journal August 01, 2023 02:58 UTC