Banks selling bond holdings to meet credit demand; loan rates may rise

Banks' incremental credit to deposit ratio, or the proportion of new deposits that banks use for fresh lending, has gone past the 100% mark. That indicates that banks are liquidating their investment portfolio to meet credit demand, putting further pressure on system liquidity.

Banks selling bond holdings to meet credit demand; loan rates may rise
Banks' incremental credit to deposit ratio, or the proportion of new deposits that banks use for fresh lending, has gone past the 100% mark. That indicates that banks are liquidating their investment portfolio to meet credit demand, putting further pressure on system liquidity.