Moody's Talks - Focus on Finance cover image

Strong balance sheets keep global banks on stable outlook despite macroeconomic gloom

Moody's Talks - Focus on Finance

CHAPTER

QT and the Banks

The banks amassed a lot of excess deposits in liquidity during the pandemic as a result of all the government stimulus. QT does reduce bank deposit levels and it raises liquidity and funding pressures but again this is from a very strong level. The risk of recession does build up pressure on household borrowers and budgets which then increases the bank's asset risk.

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