 Valuing Core DepositsJournal of Financial Services Research, 2013, vol. 43, issue 2, 197-220 Abstract: While the financial crisis has brought to the fore valuation of bank assets, equally important to a bank’s long-term health is the quality of its deposits. This paper employs bank-specific data on total and retained balances to value so-called core deposits: checking and savings and money market accounts. The empirical results indicate that core deposits have considerable value to financial institutions, often dramatically more than regulators have allowed. The empirical results also indicate that the value of core deposits varies substantially by institution. For some institutions the value of core deposits approaches the total value of the institution. I am grateful to Rob Battalio, Tom Cosimano, Dave Hutchison, Bill McGuire and seminar participants at the University of Notre Dame for their comments on earlier drafts. I am particularly grateful to an anonymous referee whose suggestions substantially improved the paper. Any remaining limitations are entirely my responsibility. Copyright Springer Science+Business Media, LLC 2013 Keywords: Core deposits; Non‐maturity deposits; Deposit rate pricing (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kap:jfsres:v:43:y:2013:i:2:p:197-220 Ordering information: This journal article can be ordered from DOI: 10.1007/s10693-012-0130-6 Access Statistics for this article Journal of Financial Services Research is currently edited by Haluk Unal More articles in Journal of Financial Services Research from Springer, Western Finance Association Contact information at EDIRC. |
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