Schwab turns to costly FHLB advances as deposits drop
Bank draws $45.6 billion in facilities carrying four times the interest rate paid on deposits
Charles Schwab increased its reliance on Federal Home Loan Banks advances for its short-term funding needs in the first quarter, as panic around regional banks’ solvency led its depositors to withdraw $41 billion.
The brokerage’s banking subsidiary increased FHLBs borrowings – which are collateralised by mortgages and other top-quality assets – from $12.4 billion at end-December to $45.6 billion at end-March, in what executives termed a “temporary” measure to counteract “continued client cash
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