The price of deposit liquidity: banks versus microfinance institutionsLaureti, C. & Szafarz, A., Nov-2016, In : Applied Economics Letters. 23, 17, p. 1244-1249 6 p.
Research output: Contribution to journal › Article › Academic › peer-review
Using data from Bangladesh, this article finds that the liquidity premium - the difference between the interest paid on illiquid and liquid savings accounts - is higher in commercial banks than in microfinance institutions. One possible interpretation lies in the higher prevalence of time-inconsistency among the poor. The observed difference in liquidity premia could be due to poor time-inconsistent agents willing to forgo interest on illiquid savings accounts in order to discipline their future selves.
|Number of pages||6|
|Journal||Applied Economics Letters|
|Publication status||Published - Nov-2016|
- Liquidity premium, present-bias, banks, microfinance, Bangladesh, SELF-CONTROL, BOOTSTRAP, POVERTY, FIELD, SIZE