The price of liquidity: CD rates charged by money market funds

We examine the cost of liquidity in rates on CDs purchased by money market funds (MMFs). We find no evidence that rates vary directly with the size of CDs. However, we do find that large MMFs receive higher rates on large CDs than small MMFs. This suggests banks pay for (potential) liquidity.

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Year of publication:	2015
Authors:	Whitledge, Matthew D. ; Winters, Drew B.
Published in:	Journal of Banking & Finance. - Elsevier, ISSN 0378-4266. - Vol. 54.2015, C, p. 104-114
Publisher:	Elsevier
Subject:	Liquidity \| CDs \| Money market funds

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Type of publication:	Article
Classification:	G19 - General Financial Markets. Other ; G21 - Banks; Other Depository Institutions; Mortgages ; G23 - Pension Funds; Other Private Financial Institutions
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011264662