Testing the effectiveness of consumer financial disclosure: Experimental evidence from savings accounts

Adams, Paul D.; Hunt, Stefan; Palmer, Christopher; Zaliauskas, Redis

doi:10.1016/j.jfineco.2020.05.009

Cited by 23 publications

(6 citation statements)

References 78 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Drechsler, Savov, and Schnabl (2020) provide further discussion of the impact of Regulation Q on deposit rates for banks and S&Ls.15 Consistent with low interest rate sensitivity,Adams et al (2021) conduct a large-scale field experiment in the United Kingdom and find that most households do not move savings accounts to other banks even if they are informed about significantly higher deposit rates elsewhere.…”

mentioning

confidence: 93%

Banking on Deposits: Maturity Transformation without Interest Rate Risk

Drechsler¹,

Savov²,

Schnabl³

2021

The Journal of Finance

222

View full text Add to dashboard Cite

We show that maturity transformation does not expose banks to interest rate risk-it hedges it. The reason is the deposit franchise, which allows banks to pay deposit rates that are low and insensitive to market interest rates. Hedging the deposit franchise requires banks to earn income that is also insensitive, that is, to lend long term at fixed rates. As predicted by this theory, we show that banks closely match the interest rate sensitivities of their interest income and expense, and that this insulates their equity from interest rate shocks. Our results explain why banks supply long-term credit.

show abstract

mentioning

confidence: 93%

Banking on Deposits: Maturity Transformation without Interest Rate Risk

Drechsler¹,

Savov²,

Schnabl³

2021

The Journal of Finance

222

View full text Add to dashboard Cite

show abstract

“…We also contribute to the literature on risk disclosures ( 46 – 49 ) and the broader literature on information disclosure ( 50 – 52 ). Although risk disclosures are common in many markets, many tend to be generic rather than specific (e.g., “driving is dangerous” versus “sharp turn ahead”).…”

Section: Discussionmentioning

confidence: 99%

Can behavioral interventions be too salient? Evidence from traffic safety messages

Hall

Madsen

2022

Science

View full text Add to dashboard Cite

Although behavioral interventions are designed to seize attention, little consideration has been given to the costs of doing so. We estimated these costs in the context of a safety campaign that, to encourage safe driving, displays traffic fatality counts on highway dynamic message signs for 1 week each month. We found that crashes increase statewide during campaign weeks, which is inconsistent with any benefits. Furthermore, these effects do not persist beyond campaign weeks. Our results show that behavioral interventions, particularly negatively framed ones, can be too salient, crowding out more important considerations and causing interventions to backfire—with costly consequences.

show abstract

“…Under costly search, lenders would earn a lender surplus of monopoly rents denoted LS in Figure 2 equal to log q(r j (c j ), p) ⇥ (log r j (c j ) log c j ) where the first term is the monopolist's markup and the second term is the monopolist's quantity. This non-zero lender surplus under costly search provides a positive rationale for sellers to endogenously differentiate, obfuscate, or otherwise increase switching or search costs (see also Ellison and Ellison, 2009;Allen, Clark, and Houde, 2019;Adams et al, 2019).…”

Section: Welfare Consequences Of Costly Searchmentioning

confidence: 99%

“…See also related evidence inAdams, Hunt, Palmer, and Zaliauskas (2019) andBhutta, Fuster, and Hizmo (2019) that many consumers underestimate the benefits and overestimate the costs of shopping for deposit products and mortgages, respectively.…”

mentioning

confidence: 99%

Real Effects of Search Frictions in Consumer Credit Markets

Argyle

Nadauld

Palmer

2020

Self Cite

View full text Add to dashboard Cite

for helpful conversations. Tommy Brown and Sam Hughes provided excellent research assistance. Palmer thanks the Fisher Center for Real Estate and Urban Economics for support. An anonymous information-technology firm provided the data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w26645.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

show abstract

Testing the effectiveness of consumer financial disclosure: Experimental evidence from savings accounts

Cited by 23 publications

References 78 publications

Banking on Deposits: Maturity Transformation without Interest Rate Risk

Banking on Deposits: Maturity Transformation without Interest Rate Risk

Can behavioral interventions be too salient? Evidence from traffic safety messages

Real Effects of Search Frictions in Consumer Credit Markets

Contact Info

Product

Resources

About