04-07-2023, 08:23 AM
Is a regional bank deposit short squeeze possible?
<!-- SC_OFF --><div class="md"><p>If several banks in an area raised their deposit interest rates high enough to attract deposits away from competitors could that cause a bank run on the other banks? It’d essentially be a gamble as to who can hang on longer. The bank with compressed margins due to higher cost or deposits or the banks losing deposits and eventually having to borrow at higher fed funds cost or even sell investments at a loss to cover. Would this be a plausible strategy for regional bank to run their competition under?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/anon9592817"> /u/anon9592817 </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/12e2vra/is_a_regional_bank_deposit_short_squeeze_possible/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/12e2vra/is_a_regional_bank_deposit_short_squeeze_possible/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>If several banks in an area raised their deposit interest rates high enough to attract deposits away from competitors could that cause a bank run on the other banks? It’d essentially be a gamble as to who can hang on longer. The bank with compressed margins due to higher cost or deposits or the banks losing deposits and eventually having to borrow at higher fed funds cost or even sell investments at a loss to cover. Would this be a plausible strategy for regional bank to run their competition under?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/anon9592817"> /u/anon9592817 </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/12e2vra/is_a_regional_bank_deposit_short_squeeze_possible/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/12e2vra/is_a_regional_bank_deposit_short_squeeze_possible/">[comments]</a></span>