The price of liquidity: CD rates charged by money market funds

Matthew D. Whitledge and Drew B. Winters

Journal of Banking & Finance, 2015, vol. 54, issue C, 104-114

Abstract: We examine the cost of liquidity in rates on CDs purchased by money market funds (MMFs). We find no evidence that rates vary directly with the size of CDs. However, we do find that large MMFs receive higher rates on large CDs than small MMFs. This suggests banks pay for (potential) liquidity.

Keywords: Liquidity; CDs; Money market funds (search for similar items in EconPapers)
JEL-codes: G19 G21 G23 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:54:y:2015:i:c:p:104-114

DOI: 10.1016/j.jbankfin.2015.01.016

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