Arbeitspapier
Wholesale funding dry-ups
We empirically explore the fragility of wholesale funding of banks, using trans-action level data on short-term, unsecured certificates of deposits in the European market. We do not observe any market-wide freeze during the 2008-2014 period. Yet, many banks suddenly experience funding dry-ups. Dry-ups predict, but do not cause, future deterioration of bank performance. Furthermore, in periods of market stress, banks with high future performance tend to increase reliance on wholesale funding. Thus, we fail to find evidence consistent with classical adverse selection models of funding market freezes. Our evidence is in line with theories highlighting heterogeneity between informed and uninformed lenders.
- ISBN
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978-92-95081-93-2
- Language
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Englisch
- Bibliographic citation
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Series: ESRB Working Paper Series ; No. 49
- Classification
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Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- Subject
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wholesale bank funding
market freezes
asymmetric information
- Event
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Geistige Schöpfung
- (who)
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Pérignon, Christophe
Thesmar, David
Vuillemey, Guillaume
- Event
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Veröffentlichung
- (who)
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European Systemic Risk Board (ESRB), European System of Financial Supervision
- (where)
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Frankfurt a. M.
- (when)
-
2017
- DOI
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doi:10.2849/366406
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Pérignon, Christophe
- Thesmar, David
- Vuillemey, Guillaume
- European Systemic Risk Board (ESRB), European System of Financial Supervision
Time of origin
- 2017
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