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Effects of Bank Funds Management Activities on the Disintermediation of Bank Deposits

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  • David E. Allen
  • Jerry T. Parwada

Abstract

This study investigates the alleged disintermediation of banks’ traditional deposit‐taking in favour of investment management activities. Using data on Australian bank‐affiliated funds and a nine‐year record of the parent banks’ liability balances, this study finds that managed funds do not displace bank liabilities. Prudential capital adequacy requirements dissuade banks from using in‐house managed investments as indirect conduits for raising funds in the same manner as deposit‐taking.

Suggested Citation

  • David E. Allen & Jerry T. Parwada, 2004. "Effects of Bank Funds Management Activities on the Disintermediation of Bank Deposits," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 31(7‐8), pages 1151-1170, September.
    • Handle: RePEc:bla:jbfnac:v:31:y:2004:i:7-8:p:1151-1170
    DOI: 10.1111/j.0306-686X.2004.00570.x
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    References listed on IDEAS

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