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http://hdl.handle.net/10071/10580
acessibilidade
Title: Determinants of bank customers' demand for liquidity: the effect of bank capital and customers' characteristics
Authors: Bernardo, C. D.
Lagoa, S. C.
Leão, E. R.
Keywords: Financial institutions
Liquidity demand
Financial literacy
Capital ratio
Banking industry
Deposits
Investor behaviour
Crisis
Portugal
Determinants
Bank customers
Bank capital
Customer characteristics
Economic instability
Risk aversion
Portfolio decisions
University education
Professional group
Sge
Investment strategies
Issue Date: 2015
Publisher: Interscience
Abstract: In contexts of economic instability, investors show an increase in risk aversion and prefer high liquidity and low-risk financial products. In this paper, we study the reasons behind bank customers holding wealth in the form of immediate liquidity. Using micro data on clients' portfolios of a Portuguese bank, we ask whether there is a relationship between bank's capital ratio and the proportion of wealth that clients allocate to demand deposits, which is a relatively unexplored topic in the literature. Special attention is also paid to the impact of investors' financial knowledge regarding portfolio decisions by looking at university education, professional group and age. Results indicate that when banks' capital ratio decreases, savers put a larger fraction of their investment into demand deposits, especially savers with greater risk aversion and knowledge. Finally, we find evidence that investors with a university education or belonging to professional groups with higher skills follow more sophisticated investment strategies.
Peer reviewed: yes
URI: http://hdl.handle.net/10071/10580
DOI: 10.1504/IJMEF.2015.072334
ISSN: 1752-0479
Ciência-IUL: https://ciencia.iscte-iul.pt/id/ci-pub-25964
Appears in Collections:DINÂMIA'CET-RI - Artigo em revista científica internacional com arbitragem científica

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