JPMorgan Deck
Why do cheap deposits matter so much to a bank's lending economics? Work a simple example.
Model answer
A bank's core spread business: it makes a $100M loan yielding 6%. Funded with consumer deposits costing 1%, the annual spread is 5% of $100M = $5M. Funded instead with wholesale borrowing at 4.5%,…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from JPMorgan Deck
- Who was J. Pierpont Morgan, and why does his legacy still matter in a JPMorgan interview?
- How was the modern JPMorgan Chase created? Walk through the key mergers.
- What is the universal-bank model, and why is it JPMorgan's key structural differentiator versus Goldman Sachs and Morgan Stanley?
- What are JPMorgan's main business segments, and how should you talk about them in an interview?
- What does JPMorgan's 'fortress balance sheet' mean?
- Why does the 'fortress balance sheet' matter strategically? What has it allowed JPMorgan to do that weaker banks could not?