CBDC and the shadow of bank disintermediation: US stock market insights on threats and remedies
Beckmann, Lars; Debener, Jörn; Hark, Paul F.; Pfingsten, Andreas
Research article (journal) | Peer reviewedAbstract
Deposit-dependent banks might be negatively affected by a central bank digital currency (CBDC) introduction. Particularly, a retail CBDC aimed at consumers may constrain cheap funding, thus eroding bank profits (deposit channel). Our empirical study reveals that stock market reactions of US banks to speeches by US Federal Reserve (FED) executives indicating they intend to introduce a CBDC are indeed more negative the more these banks depend on deposits. However, as soon as the FED promises protection against disintermediation, e.g., via a non-interest bearing CBDC or a CBDC holding limit, we observe that highly deposit-dependent banks experience positive stock market reactions.
Details about the publication
Authors from the University of Münster
| Beckmann, Lars | Chair of Banking |
| Debener, Jörn | Chair of Banking (Prof. Pfingsten) |
| Hark, Paul | Professorship of Finance (Prof. Schneider) |
| Pfingsten, Andreas | Chair of Banking |
Preisverleihungen erhalten für die Publikation
| Best Paper Award (2nd prize) Awarded by: London School of Economics; National Institute of Security Markets Award given to: Hark, Paul Friedrich; Beckmann, Lars; Debener, Jörn; Pfingsten, Andreas Announced at: 15/12/2023 | Date of awarding: 15/12/2023 Type of distinction: Best presentation award |