Deposit rate dynamics - Elevating the predictive power of pass-through rate modeling

This whitepaper explores the complexities of pass-through rate modeling and highlights the critical limitations of relying solely on historical data. Traditional models, which often focus on past policy rate movements, can leave banks vulnerable to inaccurate forecasts, particularly in today’s unpredictable economic climate. 

We discuss a few model enhancements, leveraging real-time data and market dynamics, which aim to create more precise and adaptable models, allowing institutions to more confidently make informed decisions. By understanding the nuances of deposit rate dynamics, banks can significantly improve their risk management practices, ensuring they are better prepared to navigate economic fluctuations. 

This whitepaper provides practical insights to empower your organization with the tools necessary to improve predictive accuracy and stay ahead of industry shifts.