Schwab’s short-term funding strategy shifts to secured borrowing post-2023 scare

Dealer cut unsecured borrowing and brokered deposits in favour of collateralised financing

Following last year’s regional bank liquidity scare, Charles Schwab has increasingly reoriented its wholesale funding strategy, shifting away from brokered deposits and unsecured financing towards potentially pricier forms of collateralised borrowing, Risk Quantum analysis shows.

Brokered retail and sweep deposits – Schwab’s main sources of short-term wholesale funding (STWF) – averaged $222.2 billion in the first quarter of this year, down 21% from the same period in 2023. Unsecured funding saw