U.S. Banks Improve Liquidity Levels

Liquidity levels at US banks have improved significantly in the last 12 months, according to a report by Moody’s. However, the ratings agency warned that the improvement, positively influenced by strong consumer and commercial deposit growth, ‘could come to a halt if equity markets continue to rebound.’ Nonetheless, of the 86 banking organizations surveyed, 73 per cent saw their net cash-capital positions improve from first quarter 2002 to first quarter 2003. As for bank holding companies specifically, Sean Jones, a Moody’s senior vice president, noted that more management teams are committed to maintaining a positive liquidity position at this level. ‘In March 2003 58 per cent of US bank holding companies had a positive holding company liquidity position – a gain of seven per cent over the prior year,’ he said.


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