The interest rates offered on term deposits to both retail and wholesale customers are now priced well above the rates at which the banks issue equivalent maturity debt securities, such as certificates of deposit (Graph 4). BIS central bankers’ speeches  5  Graph 3  Graph 4  Given the forthcoming liquidity regulations, a shift toward deposits certainly makes sense.
The Basel III framework views deposits as a much more stable source of funding, and has lower run-off assumptions for most types of deposits than it does for wholesale debt securities. 6  BIS central bankers’ speeches  However, as with the relative price of liquid assets, one can’t explain all of the movement in deposit pricing in terms of prospective liquidity regulations.