EconPapers    
Economics at your fingertips  
 

Deposit Rate Advantages at the Largest Banks

Stefan Jacewitz () and Jonathan Pogach ()
Additional contact information
Stefan Jacewitz: Federal Deposit Insurance Corporation
Jonathan Pogach: Federal Deposit Insurance Corporation

Journal of Financial Services Research, 2018, vol. 53, issue 1, 1-35

Abstract: Abstract We estimate differences in funding costs between the largest banks and the rest of the industry in the United States. Using a novel data set on deposit rates offered at the branch level, we document significant pricing advantages at the largest banks on comparable deposit products and deposit risk premiums. Between 2007 and 2008, the risk premium paid by the largest banks was 35 bps lower than the risk premium at other banks. This difference vanishes following a regulatory change in the deposit limit. These findings are consistent with a significant too-big-to-fail subsidy captured by the largest banks through lower risk premiums on uninsured deposits.

Keywords: Too big to fail; Risk premium; Deposits; Interest rates (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10693-016-0261-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:jfsres:v:53:y:2018:i:1:d:10.1007_s10693-016-0261-2

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10693

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.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-11-06
Handle: RePEc:kap:jfsres:v:53:y:2018:i:1:d:10.1007_s10693-016-0261-2