According to a march survey of financial executives released by the federal reserve on Thursday, 1/3 of respondents said their banks had taken action to limit the size of their balance sheets and expected their banks to continue to do so.

Another 1/3 of respondents said they would take action to maintain or reduce the size of the balance sheet if it increased.

Almost half of those who talked about limiting the size of their balance sheets identified net interest margin pressure and return on assets as important or very important factors affecting the decision.

Of those who took part in a previous survey last September, 40 per cent reported better-than-expected end-of-day balance growth in the final months of 2020, with deposit inflows exceeding expectations as the most common important driver.

40% think the average reserve level in June will be stable relative to the February level; others will be evenly divided between an increase and a decrease.

The respondents included 49 domestic banks and 31 foreign banks, which accounted for about 3/4 of the reserve balance of the banking system.