Why Do Banks Hold Cash? [extrait BMI 146]

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Why banks hold cash has become a major issue since the 2008 financial crisis demonstrated that cash holding is a major determinant in banks? chances of survival. This article investigates the determinants of bank cash holding by using international data for the period 1981-2014. Using a  large sample, we document a secular increase in bank cash holding over a 35-year period. We find evidence that the cash holding structure varies over time in the banking industry in contrast with the nonbanking sector.JEL classification: C3; G21; G28.Keywords: Liquidity creation; Cash holding motives; Banks.

Auteurs :Bancel Franck
Extrait de la revue BMI 146