Banking Strategist

BANKING INDUSTRY BALANCE SHEET WEEKLY DASHBOARD

The Bank Balance Sheet Weekly Dashboard is sourced from the Federal Reserve Bank's H.8 Assets and Liabilities of Commercial Banks in the United States through the Federal Reserve Bank of St. Louis FRED economic data service. The two sections show 25 largest domestic commercial banks (top 25 banks) on the right and all other commercial banks (all others; approximate break point is approximately $85 billion in total assets and under) on the left.

This dashboard is updated weekly (typically posted Mondays) and can provide a quick snapshot of trends in major balance sheet categories. While not specific to any local or regional geography, this dashboard can provide a measure of national trends for comparison to your local and regional activities.

Bank Liquidity: One of the key take-aways from the Great Recession of 2008 and the banking system crisis (March 2023) was the importance of real liquidity (see Change in Balance Sheet graphs above).

The bank regulators imposed rules requiring higher levels of liquid assets and liquidity ratios (Liquidity Coverage Ratio). The banks learned from the crisis that two balance sheet items were critical: capital and cash.

As banking confidence rose post-crisis, cash levels moderated.

And, with the COVID-19 driven economic collapse, banks have once again significantly elevated their cash and liquidity holdings. This action should tell us that banks are concerned about the economy amid the pandemic. And as the pandemic waned away, banks began to lower their levels of cash balances and liquidity to more historically normal levels.

With the recent banking runs and liquidity crisis, the industry has seen a surge in liquidity again - not to COVID pandemic levels, but above the levels during the early years of the Great Recession.