IDEAS home Printed from https://ideas.repec.org/p/fth/pennfi/4-79.html
   My bibliography  Save this paper

Implicit Interest on Demand Deposits

Author

Listed:
  • Richard Startz

Abstract

Traditionally, monetary theory assumes money bears zero interest. More recently, it has been recognized that banks implicitly pay interest through providing free services. In this paper, the implicit interest rate is estimated from two different sources. Implicit interest appears to be about one-half of what a competitive rate would be in the absence of the prohibition against explicit interest.

Suggested Citation

  • Richard Startz, "undated". "Implicit Interest on Demand Deposits," Rodney L. White Center for Financial Research Working Papers 4-79, Wharton School Rodney L. White Center for Financial Research.
    • Handle: RePEc:fth:pennfi:4-79
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ryadh M. Alkhareif & William A. Barnett, 2012. "Divisia Monetary Aggregates for the GCC Countries," International Symposia in Economic Theory and Econometrics, in: Recent Developments in Alternative Finance: Empirical Assessments and Economic Implications, pages 1-37, Emerald Group Publishing Limited.
    2. Douglas Evanoff & Lewis Segal, 1997. "Strategic Responses to Bank Regulation: Evidence From HMDA Data," Journal of Financial Services Research, Springer;Western Finance Association, vol. 11(1), pages 69-93, February.
    3. repec:zbw:bofrdp:1994_018 is not listed on IDEAS
    4. Duong Ngotran, 2016. "The E-Monetary Theory," 2016 Papers png175, Job Market Papers.
    5. Juan Coello, 1994. "¿Son las cajas y los bancos estratégicamente equivalentes?," Investigaciones Economicas, Fundación SEPI, vol. 18(2), pages 313-332, May.
    6. Georgopoulos, George J., 2006. "Estimating the demand for money in Canada: Does including an own rate of return matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(4), pages 513-529, September.
    7. William A. Barnett & Ryadh M. Alkhareif, 2015. "Modern and Traditional Methods for Measuring Money Supply: The Case of Saudi Arabia," IJFS, MDPI, vol. 3(1), pages 1-7, February.
    8. Jason Roderick Donaldson & Giorgia Piacentino & Anjan Thakor, 2021. "Intermediation Variety," Journal of Finance, American Finance Association, vol. 76(6), pages 3103-3152, December.
    9. Ronald Leaf, 1984. "Competitive Implicit Interest Payments in Commercial Banking," The American Economist, Sage Publications, vol. 28(1), pages 49-56, March.
    10. Serletis, Apostolos & Rangel-Ruiz, Ricardo, 2005. "Microeconometrics and measurement matters: Some results from monetary economics for Canada," Journal of Macroeconomics, Elsevier, vol. 27(2), pages 307-330, June.
    11. Walter A. Varvel & John R. Walter, 1982. "The competition for transaction accounts," Economic Review, Federal Reserve Bank of Richmond, vol. 68(Mar), pages 2-20.
    12. Tarkka, Juha, 1994. "Risk sharing in the pricing of payment services by banks," Research Discussion Papers 18/1994, Bank of Finland.
    13. Ngotran, Duong, 2020. "The e-monetary theory," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-41.
    14. repec:zbw:bofrdp:1989_026 is not listed on IDEAS
    15. Drew Dahl & Douglas D. Evanoff & Michael F. Spivey, 2002. "Community Reinvestment Act Enforcement and Changes in Targeted Lending," International Regional Science Review, , vol. 25(3), pages 307-322, July.
    16. Tarkka, Juha, 1989. "Competitive deposit rates and bank service charges," Research Discussion Papers 26/1989, Bank of Finland.
    17. Dahalan, Jauhari & Sharma, Subhash C. & Sylwester, Kevin, 2005. "Divisia monetary aggregates and money demand for Malaysia," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1137-1153, January.
    18. Douglas D. Evanoff & Larry D. Wall, 2000. "Subordinated debt and bank capital reform," FRB Atlanta Working Paper 2000-24, Federal Reserve Bank of Atlanta.
    19. Tarkka, Juha, 1994. "Risk sharing in the pricing of payment services by banks," Bank of Finland Research Discussion Papers 18/1994, Bank of Finland.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fth:pennfi:4-79. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/rwupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.