A decrease in the premiums on deposits at credit unions andbanks in 2010 may have indicated a lesser amount of new capital wasneeded to fund loans.
Research firm Market Rates Insight came to that conclusion basedon data that showed in the beginning of 2010, the average premiumon deposits was almost double the base rate (97%) and by the end ofthe year, the average premium shrank to 81% of the base rateoffered on deposits.
The decrease in the premiums on deposits indicates less newcapital is needed to fund loans and also indicates banks' need toreduce interest expense due to low interest rates on loans, MRIsaid.
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