Correspondent Blog
Tag: Carry Trade
07/08/25
How The Carry Trade is Hurting Banks
For decades community banks bolstered ROA/ROE by booking 5-year fixed-rate term loans funded with short-term deposits – called a carry trade. The carry trade has historically worked for banks because interest rates were in a long-term pattern (approximately 40yrs) of decline prior to the pandemic, resulting in improving NIM for most banks. What some bankers…