Veranstaltung
20
MAY 2025

14:15 - 15:45
IWH Research Seminar

The Deposits Channel of Monetary Policy: A Quantitative Assessment

We embed a banking sector with deposit market power into a macroeconomic model to quantify the deposits channel of monetary policy.

Who
Yang Liu  (University of Hong Kong)
Where
IWH, conference room and via Zoom
Yang Liu

Personal details

Yang Liu​ is an Associate Professor of Finance at The University of Hong Kong. His research interests span asset pricing, macro-finance, and international finance.


To join the lecture via Zoom, please register here.

We embed a banking sector with deposit market power into a macroeconomic model to quantify the deposits channel of monetary policy. When interest rates increase, banks raise deposit rates less than one-for-one and deposits flow out of the banking system, leading to contraction in lending and real economic activities. The calibrated model shows that deposits channel amplifies the real effect of monetary policy by 100%. The model can replicate the salient features of banks’ response to monetary policy shocks,  such as changes in deposit spreads, net interest margin, deposit volume, asset, net worth, franchise value. This channel is distinct from the bank balance sheet channel, which implies counterfactually large drops of bank net worth and franchise value in response to rate hikes.

Whom to contact

Professor Xiang Li, PhD
Professor Xiang Li, PhD
Economist

If you have any further questions please contact me.

+49 345 7753-805 Request per E-Mail
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