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

Matthew D. Whitledge, Drew B. Winters

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

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.

Original languageEnglish
Pages (from-to)104-114
Number of pages11
JournalJournal of Banking and Finance
Volume54
DOIs
StatePublished - May 1 2015

Keywords

  • CDs
  • Liquidity
  • Money market funds

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