deposits, other than core deposits, that banks actively solicit from other banks, or from brokers, to maintain adequate levels of liquidity. Managed liabilities are deposits that can be increased or decreased at will, such as negotiable time deposits of $100,000 or more, with maturities under one year; Eurodollar and other Eurocurrency borrowings; repurchase agreements against Treasury securities and federal agency securities; and Federal Funds purchased, to meet a bank’s needs for funds to pay off maturing deposits and fund new loans.
Such borrowings can be increased or decreased as needed to meet temporary funding gaps between maturing assets and liabilities. The negotiable CD, which evolved in the 1960s when Regulation Q imposed interest rate caps on all deposits except those above $100,000, is typically sold in $1 million pieces. These certificates of deposit pay interest at maturity, and usually have an original maturity of one to three months.