Liabilities of Commercial Banks in the United States - H.8 as of September 2023

As you can see, large time deposits and borrowings have seen the largest percentage increases from the previous year. This suggests that commercial banks are increasingly relying on these sources of funding to meet their needs.

The decline in deposits and other deposits is likely due to a number of factors, including rising interest rates, inflation, and concerns about a recession. These factors are making it more attractive for savers to invest their money in other assets, such as stocks and bonds, and less attractive to keep their money in bank deposits.

The overall increase in total liabilities is relatively small, suggesting that commercial banks are managing their liabilities carefully. However, the shift towards large time deposits and borrowings is a potential concern, as these sources of funding can be more volatile than deposits.

Here are some of the potential implications of these percentage changes in commercial bank liabilities:

• Higher interest rates for borrowers: Commercial banks need to pay interest on their liabilities, including large time deposits and borrowings. As a result, they are likely to charge higher interest rates on loans to businesses and consumers.
• Reduced availability of credit: If commercial banks are less willing to lend money, it could make it more difficult for businesses and consumers to borrow money. This could have a negative impact on economic growth.
• Increased risk to the financial system: Large time deposits and borrowings are more volatile than deposits. This means that commercial banks are more vulnerable to shocks that could lead to a decline in these sources of funding. This could have a negative impact on the financial system as a whole.