This paper provides a novel rationale for why banks combine lending and deposit taking. Contrary to existing work, it shows that demand deposits commit banks to monitoring even if deposit insurance is implemented. Investors with liquidity needs withdraw their deposits early and are not willing...

Using administrative data on deposits and loans of every Norwegian with every Norwegian bank, we show that an existing deposit account makes a household more likely to hold deposits at the same bank later despite better alternatives and more likely to borrow there. Consistent with this, banks...

Combining deposit taking with credit line provision saves on the liquidity costs banks incur to meet the liquidity needs of consumers and corporations, but it exposes them to a risk of concurrent runs on their assets and liabilities. If a bank's financial condition deteriorates, depositors have...

Asset recovery rate is a key factor for credit investors. This study explores the determinants of bank asset recovery rates during the recent downturn in the real estate sector and subsequent financial crisis. We find that banks relying on brokered deposit realize lower asset recovery rates....

We study a bank run in India in which private bank branches experience sudden and considerable loss of deposits that seek safety in state-owned public sector banks (PSBs). We trace the consequences of this reallocation using granular data on bank- firm relationships and branch balance sheets....

We study a bank run in India in which private bank branches experience sudden and considerable loss of deposits that seek safety in state-owned public sector banks (PSBs). We trace the consequences of this reallocation using granular data on bank-firm relationships and branch balance sheets. The...

How a historic drop in bank deposits shapes banks' loan supply? We exploit the effects of a large, and unexpected, increase in monetary policy rates to estimate the deposit channel of monetary policy using an extensive credit register that includes all bank-firm lending relationships in all euro...

Ongoing financial innovation and greater information availability increase the tradability of bank assets and reduce banks' dependence on individual bank managers as private information in the lending process declines. In this paper we argue that this has two effects on banks, with opposing...