Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203451
Authors: 
Aldasoro, Inaki
Balke, Florian
Barth, Andreas
Eren, Egemen
Year of Publication: 
2019
Series/Report no.: 
SAFE Working Paper 259
Abstract: 
We uncover a new channel for spillovers of funding dry-ups. The 2016 US money market fund (MMF) reform exogenously reduced unsecured MMF funding for some banks. We use novel data to trace those banks to a platform for corporate deposit funding. We show that intensified competition for corporate deposits spilled the funding squeeze over to other banks with no MMF exposure. These banks paid more for deposits, and their pool of funding providers deteriorated. Moreover, their lending volumes and margins declined, and their stocks underperformed. Our results suggest that banks' competitiveness in funding markets affect their competitiveness in lending markets.
Subjects: 
funding dry-ups
competition
spillovers
money market funds
corporate deposits
dollarfunding
JEL: 
G21
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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