The Price of Deposit Liquidity: Banks versus Microfinance Institutions

Carolina Laureti () and Ariane Szafarz

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: Using data from Bangladesh, this article finds that the liquidity premium – the difference between the interest paid on illiquid and liquid savings accounts – is higher in commercial banks than in microfinance institutions. One possible interpretation lies in the higher prevalence of time-inconsistency among the poor. The observed difference in liquidity premia could be due to poor time-inconsistent agents willing to forgo interest on illiquid savings accounts in order to discipline their future selves.

Keywords: Bangladesh; banks; Liquidity premium; microfinance; present-bias (search for similar items in EconPapers)
Date: 2016
Note: SCOPUS: ar.j
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Published in: Applied economics letters (2016) v.23 n° 17,p.1244-1249

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The price of deposit liquidity: banks versus microfinance institutions (2016)
Working Paper: The Price of Deposit Liquidity: Banks versus Microfinance Institutions (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/239872

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/239872

Access Statistics for this paper

More papers in ULB Institutional Repository from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().