How Did Depositors Respond to COVID-19?

Ross Levine (), Chen Lin, Mingzhu Tai and Wensi Xie

No 27964, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Why did banks experience massive deposit inflows during the first months of the pandemic? Using weekly branch-level data on interest rates and county-level data on COVID-19 cases, we discover that interest rates at bank branches in counties with higher COVID-19 infection rates fell by more than rates at other branches—even branches of the same bank in different counties. When differentiating weeks by the degree of stock market distress and counties by the likely impact of COVID-19 cases on economic anxiety, the evidence suggests that the deposit inflows were triggered by a surge in the supply of precautionary savings.

JEL-codes: D14 G21 G51 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-ban and nep-mon
Note: CF EFG ME
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Citations: View citations in EconPapers (7)

Published as Ross Levine & Chen Lin & Mingzhu Tai & Wensi Xie & Itay Goldstein, 2021. "How Did Depositors Respond to COVID-19?," The Review of Financial Studies, vol 34(11), pages 5438-5473.

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Journal Article: How Did Depositors Respond to COVID-19? (2021)
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