MarketWatch writes "The appeal of retail for i-banks in times of need: Deposits from brokerage accounts provide stability as funding costs rise. The article says, "Incorporated in Utah, the retail banks of Merrill Lynch and Morgan Stanley have been hauling in deposits in the form of so-called 'sweep' accounts.... Merrill Lynch Bank USA had grown its total deposits to $56.8 billion as of March 31 this year, from $52.5 billion.... Morgan Stanley Bank, its closest rival in this space, has grown its total deposits to $29.9 billion from $20 billion over the same period." J.P. Morgan analyst Ken Worthington says, "What we've been seeing is a migration from money market funds where brokers were generating a management fee, to bank deposits where they can potentially earn a wider spread. I think the pursuit of higher returns and higher income prompted this transition, in an environment where some of their investments may not have turned out the way they've expected."
