Deregulation, Deposit Markets, and Banks' Costs of Funds

Thomas P Bundt and Robert Schweitzer

The Financial Review, 1989, vol. 24, issue 3, 417-30

Abstract: Deposit interest rate deregulation and financial service innovation have led to dramatic changes in large banks' deposit composition. This paper presents a statistical cost analysis of changes in unit costs faced by banks under comprehensive financial deregulation. The results of this paper show that the unit cost of retail deposits--demand and passbook savings deposits--has increased relative to wholesale deposits--federal funds, certificates of deposit, and money market time deposits. The authors show, contrary to conventional wisdom, that changes in unit costs have been caused by processing costs rather than by interest expenses. Copyright 1989 by MIT Press.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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

Related works:
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:bla:finrev:v:24:y:1989:i:3:p:417-30

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0732-8516

Access Statistics for this article

The Financial Review is currently edited by Cynthia J. Campbell and Arnold R. Cowan

More articles in The Financial Review from Eastern Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().