Core deposits, which consist of the sum of transaction deposits, savings deposits (including money market deposit accounts), and small time deposits issued in denominations of less than $ expanded at banking organizations of all sizes in the fourth quarter. In part, this deposit growth reflected lower opportunity costs of holding monetary assets as declines in market rates outpaced those on core deposits.
In addition, this growth was likely influenced by the increases in deposit insurance coverage that were announced in October 2008. 15 Deposit growth also likely reflected bank-led initiatives to increase their deposit funding in order to reduce their reliance on managed liabilities, such as large time deposits and borrowings from the Federal Home Loan Banks, and also to fund future lending opportunities.