Literature review on non-maturity deposit stability: Established factors and recent developments

The banking turmoil of March to May 2023 has led to questions about whether the behaviour of non-maturity deposits (NMDs) has changed. The unusually fast bank depositor outflows amidst depositor panics in 2023 could have been affected by a variety of new developments including technological innovations, changing funding sources for banks, changes in competition faced by banks and the evolution in the legal and regulatory landscape. This literature review considers the extent to which these developments have led to NMD behaviour inconsistent with what has been historically established to affect depositor actions. Overall, the review finds some support for the view that the various changes to the banking and financial industry have affected NMD stability. However, the evidence also suggests changes in NMD stability in recent times have been substantially driven by traditional factors such as deposit insurance coverage and perceptions of bank insolvency. Thus, it would be difficult to conclude whether the net effect of the changes has resulted in more volatile NMD depositor behaviours.

The views expressed in this publication are those of the authors and do not necessarily represent the official views of the Committee, its members or the BIS.