Analysis of bank securities portfolios

It’s natural to think of banks as intermediaries that take in deposits and use them to make loans to businesses and individuals. But in fact, loans make up only 45 percent of the assets banking organizations. What’s the rest? A large part is accounted by securities, such as Treasury and foreign government bonds, mortgage-backed securities (MBS), municipal and corporate bonds, and equities. In this work, I take a tour of bank securities portfolios, and also discuss reasons why securities represent such a significant part of banking firm balance sheets.