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Lookup NU author(s): Dr Robert AndersonORCiD, Robert Hudson
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Abstract: Do banks extract rent from depositors who hold older deposit accounts? This study addressed this question using product level data of the UK instant access (branch based) deposit market. In the context of a deposit market two research questions related to the conditions necessary for differential pricing for existing and new customers are assessed. Specifically whether more mature or older deposit accounts have lower interest rates and does the newest deposit account in a firm’ deposit account portfolio pay an interest rate premium? Empirical support, both descriptive and econometric is provided for both questions. Interest rate setting for new and existing deposit accounts is also significantly influenced by the type of firm supplying deposits with considerable variation in returns observed.
Author(s): Anderson RDJ, Ashton JK, Hudson RS
Publication type: Working Paper
Publication status: Published
Journal: Centre for Responsible Banking and Finance Working Papers
Type of Article: Working Paper
Year: 2013
Pages: 1-34
Publisher: University of St Andrews
URL: http://www.st-andrews.ac.uk/business/rbf/workingpapers/RBF13_008.pdf
