Funding Modes of German Banks: Structural Changes and its Implications

45 Pages Posted: 12 Sep 2005

See all articles by Martin Weber

Martin Weber

University of Mannheim - Department of Banking and Finance

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 Finan├žas

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Date Written: April 2005

Abstract

This paper examines funding modes of German banks and its implications for lending and profitability over the period 1992-2002. Analyzing individual bank data from the Deutsche Bundesbank, we first find that deposits from customers lose ground in relative terms while interbank liabilities increase as a source of funding. Second, we cannot detect a negative impact of the relative decline in deposits on the lending business. In contrast, loans to customers become even slightly more important. Third, the decreasing ability of banks to mobilize deposits from customers and the substitution of deposits by interbank liabilities unfavorably affects the net interest results of savings banks.

Keywords: Banks, deposit taking, disintermediation, panel analysis

JEL Classification: G21

Suggested Citation

Weber, Martin and Norden, Lars, Funding Modes of German Banks: Structural Changes and its Implications (April 2005). CEPR Discussion Paper No. 5027, Available at SSRN: https://ssrn.com/abstract=772907

Martin Weber (Contact Author)

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

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

Lars Norden

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 Finan├žas ( email )

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

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