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Earnings Credit Rate Products Go Global

Banks plan to offer compensating balance arrangements overseas.

Earnings credit rate (ECR) programs, a long-time feature of U.S. business banking, are heading overseas. Banks are preparing to offer the products outside the United States in response to customer demand and because they think it will help them to comply with new measures of deposit stability to be imposed by Basel III.

ECR arrangements provide companies with implied interest on their balances that they can then use to offset their bank fees. Banks that are expanding ECR outside of North America include Bank of America Merrill Lynch, Citibank and J.P. Morgan Treasury Services.

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Susan Kelly

Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.

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