Banks Competing on Deposits

Last week I sent my banker friends an article about the coming funding crunch: loan growth will exceed deposit growth in 2006.  I recommended that banks engage in serious efforts to beef up core deposits (deposits that are not expensive, rate-sensitive CDs).  Now the Wall Street Journal says "Banks Sweeten Perks for New Depositors."  Here’s a link to my article: "Community Bank Challenges in 2006–And How to Overcome Them" .

Business implication if you’re not a bank: it’s a good time to re-shop your banking relationship.  In my forthcoming book, Businomics, I have a section about taking advantage of recessions.  The principle is that when your vendors are hurting, that’s the time to look for bargains.