Rising interest rates should help banks’ profit margins, right? It depends on a number of factors — not least of all banks’ ability to hold the line on deposit prices.

In the last cycle, deposit costs lagged short-term interest rates on the way up and on the way down. The following graphic shows funding costs over time for different categories of deposits and other forms of financing on one tab, and data on the industry’s funding mix over time on the other. (Text continues below.)

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