US Banks: what to do with all that cash

NII appears to be bottoming across the sector as NIM pressure from low rates eases and surging deposit growth drives bigger balance sheets and some remixing of cash into securities. With loans still disappointing and the economic outlook uncertain, Bernstein takes a closer look at one potential upside driver for NII—banks’ large reserves of cash at the Fed that have risen by 100%+ following an ongoing influx of deposits. Banks have parked a sizable portion of new deposits as low-yielding cash at