Banking beyond Deposits and Loans - How banks manage Liquidity, Treasury and Risk cover art

Banking beyond Deposits and Loans - How banks manage Liquidity, Treasury and Risk

Banking beyond Deposits and Loans - How banks manage Liquidity, Treasury and Risk

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Summary
  • Where do banks deploy funds apart from loans?
  • Why do banks rely on funding sources other than deposits?
  • Does money moving into mutual funds actually reduce bank deposits in the way many assume?
  • How does loan growth also help create deposits in the banking system?
  • What do episodes like Silicon Valley Bank teach us about liquidity and ALM risk?

    In this episode of Banking Reframed podcast, eminent banker Ramesh Krishnan explains the less visible side of banking in simple language — treasury, liquidity management, ALM, funding sources, deposit flows, and balance sheet risk.

    A practical episode for bankers, BFSI professionals, banking aspirants, and anyone who wants to better understand how banks really manage money.

    ******************

    Timestamp:
    00:00 – Quick snippets from the episode
    02:36 – Guest introduction
    04:33 – Why banks cannot lend 100% of their deposits
    05:30 – Understanding embedded option risk
    06:04 – CRR and SLR explained
    09:56 – Why banks invest in instruments other than loans
    13:20 – Sources of bank funds beyond deposits
    14:05 – Understanding the CD ratio
    14:48 – The call money market
    15:14 – Repo and TREPS explained
    16:06 – Refinance windows for banks
    16:39 – Asset securitisation and collateralised debt obligations
    19:15 – Reserve-adjusted cost of funds
    20:15 – Why equity investments can still impact deposit growth
    23:26 – Purchased funds in banking
    24:03 – Do bank loans create deposits?
    24:35 – The money multiplier explained
    26:21 – How money can move out of the banking system: the example of taxes
    29:44 – How banks manage funds operationally
    32:43 – What liquidity really means in banking
    39:54 – Investment risk and ALM risk
    41:37 – Tenor vs duration
    44:55 – ALM risk examples: Northern Rock and Silicon Valley Bank

    ________________________

    Host: Srikumar Nair, Co-founder – BygC & formerly senior banker at HDFC Bank
    LinkedIn: https://www.linkedin.com/in/srikumarnair68/

    Guest: Ramesh Krishnan, formerly GM-Treasury at Karur Vysya Bank
    LinkedIn: https://www.linkedin.com/in/ramesh-krishnan-09621762/

    ________________________

    Podcast also available on: Spotify & YouTube
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