Banks Look to Grab Their Share of Spoils From Deposit Swap Boom

The article discusses the surge in deposit swaps, a practice that allows regional banks to retain large customer deposits during periods of market volatility. This service, which became popular in the aftermath of the industry turmoil in 2020, has been experiencing a significant boom. Banks are now seeking to capitalize on this trend by capturing a portion of the profits generated from these deposit swap transactions. The article highlights that this business has been lucrative for the firms that facilitate these swap arrangements, and banks are eager to get a share of the spoils. The article suggests that the increasing demand for deposit swap services reflects the ongoing challenges faced by regional banks in maintaining a stable deposit base, particularly during times of market uncertainty. As a result, banks are looking to leverage this service to protect their customer deposits and potentially generate additional revenue.