As US banks continue to grow their deposit base, they are reducing reliance on commercial paper (CP). Why pay for funding when depositors are willing to provide capital for free and in increasingly larger amounts? On the other hand foreign-owned banks, a number of whom don't have a large retail presence in the US, have recently increased their issuance of CP. The chart below shows the divergence in CP outstanding between the two groups.
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| Source: FRB |
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