Roberto Pinto, Lancaster University Management School

Campus WU Vienna D3.0.218 12:30 - 13:30

Organizer WU Vienna

The Finance Brown Bag Seminar is held by the Institute for Finance, Banking and Insurance (WU Vienna) and the Vienna Graduate School of Finance (VGSF). It serves as a presentation platform for PhD students, faculty members, and visitors. An overview of BBS on the website of the Institute for Finance, Banking and Insurance.


Roberto Pinto, Lancaster University

Non-financial firms as liquidity providers to banks: Evidence from the unsecured money market

We study the liquidity provision activities by non-financial firms to banks in the short-term wholesale unsecured money market (UMM). Using transaction-level data from the ECB, we document that non-financial firms act as one of the major liquidity providers to banks in the UMM, with daily trading volume of €9 billion. Firms in the UMM lend almost half of their cash to banks mainly through call accounts and term deposits, and mainly to domestic banks. Using the Covid-19 outbreak as a shock to firms’ cash demand, we show that greater cash demand leads to greater liquidity provisions, especially for firms more resilient to the Covid-19. More resilient firms provide liquidity with longer maturities, have more lending transactions, and lend to more banks.

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