Peter Duffy, Managing Director at Piper Sandler, joined us on the show to share his insights on the looming battle for core deposits and its impact on a financial institution's margin. Peter shares new research findings on this topic and takes a deep dive on its significance.
Not only does Peter discuss this looming battle and its background, but he also talks about why banks will pay what they need to but won’t offer their best rate on a term sheet, as credit unions ultimately offer better rates than banks do.
He also examines the regulatory changes that occurred in 2014 — how money center banks became aggressive on core deposits. Banks had regulations that favored them, which resulted in the DNA of banks being rewired by regulation, longterm impact potentially dramatic (below economy of scale)
In addition, Peter discussed why pandemic liquidity is becoming so precious to financial institutions and what it means for FIs without scale -- forcing credit unions and their boards to address how they’re going to deal with matching market on rates.
Lastly, he addressed how boards and management will deal with this from a liquidity and earnings perspective -- with a possible ripple effect in the increased desire for more FI mergers.
Check it out and let us know your thoughts. And be sure to watch the entire episode below for all the details.
Mike Lawson, Host
Married to a beautiful and wonderful wife, raising 5 kiddos (including twins!), enjoy helping others tell their stories, and love surfing SoCal waves. Keep it simple.