Items on the liabilities side of the bank balance sheet which – are usually permanently available to a bank and – are not subject to too many changes over time. These include sight deposits and savings deposits of private households; experience has shown that their level is less influenced by cyclicality. However, these primarily stable forms of deposits cannot be used to achieve rapid growth in total assets through generous lending. In boom phases with strong demand for credit, banks therefore resort to funds that can be raised at short notice domestically or abroad, but may also be withdrawn again at short notice. – The demonstrably large fluctuations in noncore deposits offer one explanation for banks’ vulnerability over the business cycle. – See core deposit, deposits, maturity transformation, credit cycle, credit crunch, crisis foreshadowing, procyclicality, economic indicators, important, cyclicality.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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