September 19, 2022 The large wave of deposits that swept over the banking industry over the past two years began to slowly recede in the second quarter. Bank deposits are still more than $3 trillion above their pre-Covid trend level, so banks have not been in a rush to increase the interest they pay on those deposits. This has enabled them to expand their net interest margin quickly. Bank stocks, however, have not benefited from the rising rate environment and have suffered a