The weird situation lies in the discrepancy between deposit rates and loan rates. Deposit rates are rising, while loan rates aren't rising at all. This is not news to everyone, but most of the people not in the banking industry wondering.
One reason that we’ve mentioned last time〈see the “Effects of Credit Derivatives” at my blog：http://caffein1975.blogspot.com/〉.
The others would be talked now. For those banking conglomerates eager for growing must pay more for interest-bearing deposits in order to maintain liquidity then the credit rates usually cut in exchange for deposits, especially for business loans.
The liquidity does matter. And securitizations would be a viable funding conduit for banks. The trend is, as commercial loans are chased to fill the conduit, the deals are growing smaller and smaller.
For the growth sake, the margin of commercial loans squeezed.
If not concerning about the growth then the profits do the talk- to remain where they are or shrink a bit-.
Reference：http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2006-08-17-13360.html#
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