How Did Depositors Respond to COVID-19?-Reference-Cited by-同舟云学术

How Did Depositors Respond to COVID-19?

Published:2021-06-17 Issue:11 Volume:34 Page:5438-5473
ISSN:0893-9454
Container-title:The Review of Financial Studies
language:en
Short-container-title:

Author:

Levine Ross¹,Lin Chen²,Tai Mingzhu²,Xie Wensi³

Affiliation:

1. Haas School of Business, University of California, Berkeley

2. Faculty of Business and Economics, The University of Hong Kong

3. CUHK Business School, Chinese University of Hong Kong

Abstract

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.

Publisher

Oxford University Press (OUP)

Subject

Economics and Econometrics,Finance,Accounting

Link

http://academic.oup.com/rfs/advance-article-pdf/doi/10.1093/rfs/hhab062/38710403/hhab062.pdf

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