The Price of Deposit Liquidity: Banks versus Microfinance Institutions
Carolina Laureti () and
ULB Institutional Repository from ULB -- Universite Libre de Bruxelles
Using data from Bangladesh, this article finds that the liquidity premium – the difference between the interest paid on illiquid and liquid savings accounts – is higher in commercial banks than in microfinance institutions. One possible interpretation lies in the higher prevalence of time-inconsistency among the poor. The observed difference in liquidity premia could be due to poor time-inconsistent agents willing to forgo interest on illiquid savings accounts in order to discipline their future selves.
Keywords: Bangladesh; banks; Liquidity premium; microfinance; present-bias (search for similar items in EconPapers)
Note: SCOPUS: ar.j
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Published in: Applied economics letters (2016) v.23 n° 17,p.1244-1249
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Journal Article: The price of deposit liquidity: banks versus microfinance institutions (2016)
Working Paper: The Price of Deposit Liquidity: Banks versus Microfinance Institutions (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/239872
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