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Natural disasters are negative shocks that can severely disrupt the communities in which they occur. Disasters like hurricanes, tornados, floods, wildfires, and earthquakes, moreover, can cause severe property damage, including damages to homes, businesses, and automobiles. An important issue that arises is whether branches of banks in communities affected by natural disasters raise deposit rates to attract additional deposits in response to any deposit withdrawals and to meet any increase in loan demand for the rebuilding that takes place. Studies of the responses of banks to natural disasters increasingly find it useful to rely on a difference-in-differences (DID) identification strategy. The contribution of our paper is to examine how different choices that can be made affect the empirical results. Importantly, as our empirical results indicate, the discretion that a researcher uses in terms of the choices made at different stages do indeed produce different conclusions about the impact of natural disasters on bank deposit rates. If we do not match branches affected by natural disasters with those in adjacent communities not affected the results indicate that natural disasters have a statistically negative effect on deposit rates without matching and with a low degree of matching. However, when we use a medium or a high degree of matching there is no statistically significant effect. Moreover, when we use two different matching methods, the results differ. In the case of PSM, we find a statistically significant effect, but no effect in the case of CEM.

We demonstrate the passthrough of Treasury supply to deposit funding through bank market power. We show that an increase in Treasury supply leads to a net deposit outflow. At the same time, reliance on wholesale funding decreases. The effect is heterogeneous in nature - banks in more competitive markets experience larger outflows. The explanatory power of Treasury supply is not driven by monetary policy and bank-specific investment opportunities. Our empirical findings are rationalized with a model of imperfect deposit competition. Consistent with The Deposits Channel of Monetary Policy, the model and empirics predict the opposite effect for Fed Fund rate hikes: there is a larger response in less competitive markets. Our results also shed light on the effect of the Reverse Repurchase (RRP) Facility on monetary policy passthrough.

The purpose of this article is to illustrate a financial fraud investigation by the way of a case study inspired by the famous Polly Peck PLC fraud case. After exploring the features of an investigation plan, false accounting and theft charges are explained and exemplified. Various techniques of tracing the crime proceeds are analysed, as well as investigative models and methods to provide evidence. Methodologically, economic fraud investigations are discussed through an in-depth literature review. The investigative models applied are characterised by Data Mining techniques (Decision Trees, Neural Networks and Benford’s law) as well as the Net Worth Method, the Bank Deposit Method, the Specific Item Method and Digital Link Analysis. The case study shows that Benford’s law and Neural Networks, together with the Specific Item Method can render results admissible in criminal court in cumbersome financial fraud cases involving several jurisdictions and complex banking arrangements.

This paper estimates the determinants of financial literacy for school children and also evaluate the effectiveness of the SchoolBank project. SchoolBank is a standard educational module developed by National Bank of Georgia (NBG) in collaboration with Child and Youth Finance International (CYFI). The empirical results show that neither gender and grade nor the geographical location of the school and the source of income do not significantly affect the initial level of financial literacy of selected school children. But a positive interdependence between having a bank deposit and financial literacy is captured. Another contribution of the paper is to evaluate the effectiveness of the SchoolBank project. The study shows the overall improvement of financial literacy among selected school children. Furthermore, we observe that such an improvement of financial literacy is mostly driven by a significant increase of financial knowledge and attitudes, while the effect on financial behavior is very limited.

In recent years the Russian banking system has witnessed numerous bank license withdrawals. Many of the failed banks had significant volumes of retail deposits in their liabilities, thus, transmitting the default burden to the Deposit Insurance Agency and ultimately to the taxpayers. In their attempt to stay in the market banks may try to attract the depositor funds even more intensively when the failure is not far away. The main assumption of this paper is that banks raise additional funds through inflated deposit interest rates – the overstatement strategy – before leaving the market. We use unique data on Russian bank deposit interest rates for deposits of different maturities in 2015–2016 combined with data about bank fundamentals coming from their financial statements. The results suggest that if a bank offers too generous interest rates for deposits for 180-365 days this can be a signal of a significantly higher probability of license withdrawal in 3 quarters. In their attempt to urgently attract funds when moving closer to default banks assign the highest rates for the longest-term deposits, with the maturity over one year. The interest rates higher than the market average dramatically increase the probability of a bank failure in 2 quarters.

This study examined macroeconomic determinants of bank deposit of Nepalese commercial banks. Using the data of 18 commercial banks listed in NEPSE for the period 2008-2013. This study focuses on quantitative research approach. Statistical package SPSS has been used to analyzed the data. In this study fixed deposit and saving deposit are dependent variables where GDP growth rate, inflation, numbers of branches and ROA are independent variables The major conclusion for the study is that lagged log fixed deposit, numbers of branches, trend and lagged log saving deposit are considered as important variable for deposit in Nepalese banking sector. This implies that these explanatory variables have the heights impact and influence on the bank deposit of commercial bank and change in it will yield the highest change in banks deposit.

Historically, U.S. savings banks were owned by their customers, in particular by their depositors. In recent decades, however, many savings banks have demutualized, by converting from customer ownership to investor ownership. This paper provides an assessment of the effect on depositor welfare of such events. We first estimate a random coeffcients logit model of bank deposit account choice, using data on commercial and savings banks from 1994 to 2005. Having recovered depositors' preferences for bank attributes, we then measure the effect on depositor welfare of a simulated demutualization of all customer-owned savings banks. We find that, on average, depositors' welfare would increase. In particular, if demutualized savings banks offered a deposit rate in line with other investor-owned savings banks, each depositor would gain $1.14 annually, for a total of $22 million for each state and year. Our findings cast doubt on whether U.S. customer-owned savings banks are well serving their customers' interests, and offers a new explanation for observed U.S. savings bank demutualizations.

We investigate the optimal asset allocation of an investor who can invest in a fixed-term security that is only traded at time 0. Using a generalized martingale approach, we solve the investor's optimal portfolio problem, determine the optimal allocation to fixed-term securities, and provide a representation of trading strategies in terms of a liquidity-related derivative. We apply our approach to two benchmark scenarios: fixed-term fixed-rate bank deposits, and unspanned closed-end security that can only be traded at time 0. We show that both can be key parts of the investor's optimal asset mix, and we investigate the dependence of optimal allocations to fixed-term investments, implied liquidity premia and other characteristics on the underlying model parameters.

This paper tests for the existence of market power in banking, using data on demand deposit rates of households and corresponding market rates in five euro area countries. An implicit measure for market power is based on a partial adjustment model that also allows for an asymmetric response of deposit rates to changes in market rates. The period covers the ten years since introduction of the euro. The analysis indicates that banks are exercising major market power within the euro area. In addition to general sluggishness, bank deposit rates’ reactions are clearly asymmetric: flexible when market rates are decreasing and rigid when rates are increasing. The degree of asymmetric behaviour can be interpreted as a further indication of the market power banks exercise. Despite country differences, a general pattern of interest rate adjustment in demand deposit pricing is observable.

1. The elements of fear and greed (which drive the capital markets), are clearly visible in the trends of allocation of assets by the investors in terms of cash and stocks. This can be seen in the levels of market cap and the levels of bank deposits in the economy. When there is fear, the bank deposit levels go up. And, when there is optimism, the market cap levels go up.2. In this background, here we have made a small attempt to compare the BSE market cap levels (over the period starting January 2007), with the aggregate bank deposits in the banking system. The relative measure of "the entire market capitalization of BSE as % of aggregate bank deposits in the entire banking system" reflects the level of risk appetite in the investor community.3. For instance, in January 2007, the BSE market cap as % of aggregate bank deposits is at the level of 152%, which means BSE market cap is 1.52 times more than the entire bank deposits.6. With the markets started recovering since March 2009, again this level of BSE market cap as % of aggregate bank deposits has crossed 100% levels and currently, these levels are at about 129%.7. In this backdrop of current levels of this ratio, it may be the case that the markets may be slowly moving away from being undervalued, relatively speaking in terms of aggregate bank deposits in the system. However, the current levels of the said % are nowhere close to the stretched levels of December 2007.

Taking the Spanish market for deposits as a case study we show the importance of properly controlling for the quality of the services provided when assessing the degree of banking competition. While a simple approach based on estimating the price elasticity of the residual supply of deposit funds faced by banks does not reveal any increase in competition, such an increase is clear when the interest rate on deposits is "corrected" according to the behaviour of variables that proxy the quality of the different services embedded in a bank deposit.

This paper presents econometric analyses on the determination of bank deposit and lending rates using longitudinal Finnish data. Interest rate pass-through is very strong, possibly complete, in the case of lending rates; in the case of deposit rates the pass-through is far from complete, even in the long term.The monetary union has benefited customers by decreasing the average rate on new loans.Credit and interest rate risk premiums are clearly observable in banks' lending rates.The impact of money market rates on loan stock rates seems to have been non-linear; no obvious explanation for this phenomenon has been found. Key words: banking, interest rates JEL classification numbers: G21, E43, E44

This paper examines the contributions of various factors on China's economic growth. The methodology is discussed in papers by Levine and Renelt (1992) and Sala-i-Martin (1997). We estimate regressions with growth of output and a variety of total 49 factors, gathered from a variety of sources. Using the panel data from 1978 to 1999 and for 30 provinces, autonomous regions and independently administered cities, we find that provinces with more innovation capital and with more bank deposit to GDP ratios tend to experience higher economic growth. We also find that provinces which collect more revenue, but spend less will have lower growth rates. Out of the 49 variables, other factors that negatively correlated to growth rates also include implied population (both numbers and ratio) migrating into a province, SOE industrial output as percentage of total industrial output, SOE staff & workers as percentage of total employment, kilometers of railroad per square kilometers of area, high education teachers as percentage of population, and net export relative to GDP. Primary school students enrolled as percentage of population and telephones per capital are found to be positively correlated to growth.

The idea that regional economic performance affects bank health is intuitive and broadly consistent with the aggregate banking data. That said, micro-level research on this relationship provides a mixed picture of the importance, size, and timing of regional variables for bank performance. This paper helps rec oncile the heterogeneous findings of previous research by: (1) employing a unique "composite measure" of regional economic performance that combines several regional indicators into a single index; (2) constructing bank-specific measures of regional economic conditions, based on bank deposit shares, that account for banks' presence in several states; and (3) estimating models for all banks and intra- and inter- state banks separately. Empirical results based on this ba nk-specific composite regional measure point to a tractable link between regional economic performance and bank health. The importance of regional variables holds for both intra- and inter-s tate banks. Out-of- sample forecasts indicate that the composite index also helps tie down the relative riskiness of bank portfolios across states. Finally, although interstate banks do seem to diversify away some of their portfolio risk, our analysis sugge sts it is too soon to c onclude that interstate banks are immune from regional influences.

This paper shows that the impact of market structure on bank deposit interest rates is complex. Both market size structure and multimarket bank presence have independent effects on rates. There is evidence that mid-size banks were more aggressive competitors than other banks, but that the effect of market structure on deposit rates has evolved over time, with mega-banks recently becoming more aggressive competitors. This may be related to the growth of mega-banks in many markets. These findings have implications for existing theories of deposit pricing and, by extension, antitrust policy in banking.

This paper identifies the sources of conflicts between debtholders and stockholders in commercial banks, considering the potential influence of bank deposit insurance and regulations restricting bank capital ratios, merger activities, and dividend payments. We address the means by which debt covenants are used to reduce these costly conflicts by examining a period when change in capital regulations occurred. We advance a general Substitute Regulations Hypothesis: regulations that reduce the expected costs of bondholder-stockholder conflicts substitute for costly covenants. Our results support this hypothesis. We document variation in the choice of debt covenants, and hence debt structure, and relate that variation to bank regulations.