Year: 2025
Type: article
Abstract: Consistent with a lifecycle model and localized deposit issuance and lending, this paper finds that banks operating in local areas with older populations issue less wholesale funding and more retail deposits that are paid relatively low interest rates, particularly at longer maturities. Despite these banks’ deposit rates being lower and slower to adjust, their deposits are less likely to be withdrawn when market interest rates rise. Moreover, these banks’ assets are composed of more securities and fewer loans, particularly business and residential loans. They also choose securities and loans with relatively long maturities, significantly raising their asset–liability maturity gap.
DOI: 10.1111/jmcb.70020
Authors: PANAGIOTIS AVRAMIDIS, GEORGE G. PENNACCHI
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4416686785