Liquidity or profitability: How retail investors can shape liquidity risk models in times of high interest rates
Roméro Diaz, Nicolas De Bondt, Jan Veredas, David
Roméro Diaz, Nicolas
De Bondt, Jan
Veredas, David
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Publication Type
White paper
Editor
Supervisor
Publication Year
2023
Journal
Book
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Publication End page
Publication NUmber of pages
12
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Abstract
The great success of the one-year “Staatsbon” or government bond was caused by the low deposit rates at Belgian banks and the reduction in withholding tax (from 30% to 15%). This forced banks to revise their deposit rates and give up profitability, or to retain the low rates and lose liquidity. Investor demand for high-interest, fixed-income instruments means that banks need to readjust their risk models and compete with sovereign and private sector alternatives.
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Keywords
Accounting & Finance, Systainability