Please use this identifier to cite or link to this item:
Arnold, Eva A.
Größl, Ingrid
Koziol, Philipp
Year of Publication: 
Series/Report no.: 
DEP (Socioeconomics) Discussion Papers, Macroeconomics and Finance Series 2/2015
German savers are renowned for preferring safe, long-term investments, thus providing patient capital, with bank deposits playing an important role. Using a unique data set provided by the Deutsche Bundesbank for German banks, we examine whether German depositors are really that patient, abstaining from any type of market discipline, and how the financial crisis might have changed a well-established habit. Our empirical investigation reveals the existence of market discipline with a high degree of heterogeneity depending on banks' governance structures. The announcement of a state guarantee for bank deposits following the collapse of Lehman Brothers succeeded in calming depositors of all banking groups but did not remove market discipline entirely. Remaining disciplinary reactions by depositors of different banking groups increase in homogeneity but some differences remain.
market discipline
bank depositor behavior
bank risk taking
deposit rates
Document Type: 
Working Paper

Files in This Item:
499.11 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.