Working Paper

Bank deposit rate clustering: theory and empirical evidence


Abstract: An examination of banks' optimal deposit-rate-setting behavior when some customers have limited recall, showing that when banks exploit this phenomenon, deposit rates will tend to be set at round fractions and will be relatively \"sticky\" at these levels.

Keywords: Bank deposits; Interest; Prices;

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Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Working Papers (Old Series)

Publication Date: 1996

Number: 9604