COVID-19, Bank Deposits, and Lending

42 Pages Posted: 5 Jul 2020 Last revised: 31 May 2022

See all articles by Özlem Dursun-de Neef

Özlem Dursun-de Neef

Goethe University Frankfurt

Alexander Schandlbauer

University of Southern Denmark

Date Written: May 18, 2022

Abstract

During the pandemic, households accumulated savings in their deposit accounts as a result of a reduction in their spending, which occurred due to the restrictions on their mobility. This led to a significant increase in bank deposits for banks located in counties with a larger reduction in spending. Banks, in turn, used these additional funds to issue more real estate loans. This implies that policies that might affect household spending would lead to changes in the volume of deposits in the banking system, which have consequences on banks' loan supply.

Keywords: COVID-19; Bank deposits; Bank lending

JEL Classification: G21, E51

Suggested Citation

Dursun-de Neef, H. Özlem and Schandlbauer, Alexander, COVID-19, Bank Deposits, and Lending (May 18, 2022). Journal of Empirical Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3642522 or http://dx.doi.org/10.2139/ssrn.3642522

H. Özlem Dursun-de Neef

Goethe University Frankfurt ( email )

House of Finance, Campus Westend
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, Frankfurt am Main 60629
Germany

HOME PAGE: http://sites.google.com/site/oezlemdursundeneef/

Alexander Schandlbauer (Contact Author)

University of Southern Denmark ( email )

Campusvej 55
Odense, 5230
Denmark

HOME PAGE: http://sites.google.com/site/alexanderschandlbauer/

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