Interest ratesIt seems to me that the banks have excess liquidity. Does this suggest that they might have hard time originating new loans/mortgages? Do any of you guys keep track of the balance sheet numbers from OSFI? Is there any source for checking whether HCG was able to follow-up on their planned US securitization or on the Bank of Canada asset-backed asset purchases?
I checked my RBC "High" Interest E-Savings account and it pays ridiculous 0.05% that is not a type - a 1/20th of a percent. I thought I read it wrong the first time. Oaken and EQBank have also slashed rates on their savings accounts as well as GICs. I have an EQBank account as well and it dropped it interest rate down from 2.30% to 2.00%. To get 2.30% on a deposit in EQBank right now, you have to buy a 4 or 6 year GIC. Oaken has the same savings rate but a bit higher GIC rates - all flat at 2.30% from 1 year upwards.
This is exact opposite of what I would have expected - if there would be trouble on the financial markets, I would have anticipated a rise in interest rates since banks and companies would be trying to attract as much money as possible. It seems that banks do not want depositor's money.
How do you guys make sense of these numbers? Since both HCG and EQB take longer term deposits to finance shorter-term mortgages, I wonder if today's lower interest rates on both mortgages and deposits will not mean drop in NIM while the current cheaper deposits won't translate into higher NIM until few quarters out (and only if the mortgage rates from the big banks will go up).