Why are branches of other banks included in determining the prevailing rate in a geographic market area?

Compliance > Deposits > Brokered Deposits
Q:  Why are branches of other banks included in determining the prevailing rate in a geographic market area?
 
A:    Individual branches of other institutions are considered to be competitors in soliciting deposits within a market area. As mentioned previously, the regulations define the national rate as “a simple average of rates paid by all insured depository institutions and branches for which data are available.” Excluding branches in calculating the prevailing rate for a local market would be inconsistent with the methodology for calculating the national rate.
 

This can be found in FDIC’s FAQs on Brokered Deposits, which can be found at https://www.fdic.gov/news/news/financial/2015/fil15002a.pdf

Add Feedback