U.S. Savings Banks' Demutualization and Depositor Welfare

Mattia Girotti and Richard Meade

Working papers from Banque de France

Abstract: Originally, U.S. savings banks were owned by their depositors. In recent decades, many savings banks have demutualized , by converting from customer to investor ownership. We examine the implications of such events for depositor welfare. We introduce a random coefficients logit model of bank account choice and estimate depositors' tastes for bank characteristics (including banks'ownership type). We then measure the effect on depositor welfare of a simulated demutualization of all customer-owned savings banks. We find that depositors' welfare would increase on average.In particular, if demutualized savings banks offered a deposit rate in line with existing demutualized banks, each depositor would gain $1.14 annually, for a total of $22 million for each state and year.

Keywords: Banks; Deposits; Demand Estimation; Customer Ownership; Mutuals. (search for similar items in EconPapers)
JEL-codes: D12 G21 L21 P13 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2017
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: U.S. Savings Banks' Demutualization and Depositor Welfare (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:639

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