Household Deposits’ Availability for Credit Institutions during Tensions on Funding Markets – A Case of the Euro Area Countries
Household Deposits’ Availability for Credit Institutions during Tensions on Funding Markets – A Case of the Euro Area Countries

Author(s): Katarzyna Kochaniak
Subject(s): Business Economy / Management, Economic policy, EU-Accession / EU-DEvelopment, Financial Markets
Published by: Masarykova univerzita nakladatelství
Keywords: banks’ liquidity; household deposits; banks’ debt funding;
Summary/Abstract: The EU regulations indicate household deposits as stable funding for credit institutions under stress and in the long run. However, the recent financial crisis revealed runs in the euro area, including ones that threatened financial stability. They encouraged to analyse the changes in the levels of deposits placed by households with credit institutions in individual member countries in the period of distress in funding markets. The study aims to analyse the fluctuations in the levels of household deposits and, in particular, to recognise regularities and irregularities in this respect. It applies regression models with time series data on household deposit totals for individual countries in the euro area. The results display considerable cross-country differences in the formation of deposit levels in the period analysed. For several member states, the trend could be recognised only in specified sub-periods. Only for some of the countries, the linear trend described a general long-term direction of changes in household deposit totals, confirming its stability in the entire period. In most member states, seasonal fluctuations in deposit totals occurred, but they related to various months. The study allowed identification of unexpected deposit outflows as well, which resulted, among other reasons, from financial problems of credit institutions. On the other hand, the adjustments in deposit guarantee schemes fostered households’ confidence in these entities and led to the unexpected increases of the deposits in selected countries.

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