How Did Depositors Respond to COVID-19?
Review of Financial Studies
; 34(11):5438-5473, 2021.
Article
in English
| Web of Science | ID: covidwho-1511022
ABSTRACT
Why did banks experience massive deposit inflows during the pandemic? We discover that deposit interest rates at bank branches in counties with higher COVID-19 infection rates fell by more than rates at branches-even branches of the same bank-in counties with lower infection rates. Credit drawdowns, national policies, such as the Payment Protection Program, and a flight-to-safety do not account for these cross-branch changes in deposit rates. Evidence suggests that higher local COVID-19 infection rates are associated with households' greater anxiety about future job and income losses, anxiety that induces households to reduce spending and increase deposits.
Full text:
Available
Collection:
Databases of international organizations
Database:
Web of Science
Language:
English
Journal:
Review of Financial Studies
Year:
2021
Document Type:
Article
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