Deposit flows and the January effect in deposit rates
Vladimir Kotomin and
Artem Meshcheryakov
Journal of Financial Research, 2025, vol. 48, issue 3, 1278-1314
Abstract:
Noninterest‐bearing deposits (NIBDs) flow out of U.S. banks in January and February. Banks respond to this seasonal outflow by increasing interest‐bearing deposit (IBD) rates. We document that branch‐level deposit spreads are 4 to 11 basis points higher in January than in December. Increasing rates works as banks replace four‐fifths of the lost NIBDs with IBDs. We also find that, following NIBD outflows, banks resist cutting lending but pass the increases in the cost of funds onto borrowers. Banks do cut lending in response to total deposit outflows, but only in the pre‐crisis period.
Date: 2025
References: Add references at CitEc
Citations:
Downloads: (external link)
https://doi.org/10.1111/jfir.12430
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:jfnres:v:48:y:2025:i:3:p:1278-1314
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0270-2592
Access Statistics for this article
Journal of Financial Research is currently edited by Jayant Kale and Gerald Gay
More articles in Journal of Financial Research from Southern Finance Association Contact information at EDIRC., Southwestern Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().