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Journal of Banking & Finance Vol. 54 2015

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

Matthew D. Whitledge; Drew B. Winters

Texas Tech University

Abstract

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.

DOI
10.1016/j.jbankfin.2015.01.016
Volume
54
Pages
104-114
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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