Funding Modes of German Banks: Structural Changes and its Implications

Journal of Financial Services Research, Vol. 38, pp. 69-93, 2010

43 Pages Posted: 13 Apr 2005 Last revised: 31 Jan 2012

See all articles by Lars Norden

Lars Norden

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE); Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças

Martin Weber

University of Mannheim - Department of Banking and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: 2010

Abstract

We investigate the funding modes of German banks and the implications for lending and profitability during 1992-2002. We find that at many banks, deposits from customers decrease in relative terms while interbank liabilities increase as a source of funding. We cannot detect a negative impact of the relative decline in deposits on lending. The decreasing ability of banks to collect deposits and the substitution of deposits by interbank liabilities unfavorably affects the net interest result of banks that exhibit a deposit deficit, especially savings banks. Our findings indicate a creeping disintermediation, which leads to a lengthening of the intermediation chain.

Keywords: Universal banking, Deposit taking, Interbank markets, Disintermediation

JEL Classification: G20, G21

Suggested Citation

Norden, Lars and Weber, Martin, Funding Modes of German Banks: Structural Changes and its Implications (2010). Journal of Financial Services Research, Vol. 38, pp. 69-93, 2010, Available at SSRN: https://ssrn.com/abstract=675801

Lars Norden (Contact Author)

Getulio Vargas Foundation (FGV) - Brazilian School of Public and Business Administration (EBAPE) ( email )

Rua Jornalista Orlando Dantas 30
Rio de Janeiro, 22231-010
Brazil
+552130832431 (Phone)

HOME PAGE: http://www.larsnorden.de

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças ( email )

Praia de Botafogo 190/1125, CEP
Rio de Janeiro RJ 22253-900
Brazil

Martin Weber

University of Mannheim - Department of Banking and Finance ( email )

D-68131 Mannheim
Germany
+49 621 181 1532 (Phone)
+49 621 181 1534 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
280
Abstract Views
1,788
rank
113,080
PlumX Metrics