IDEAS home Printed from https://ideas.repec.org/h/wsi/wschap/9781800611917_0005.html
   My bibliography  Save this book chapter

The Growth of Social Banks, Investment Restrictions, and Excess Liquidity Risk

In: Modern Finance and Risk Management Festschrift in Honour of Hermann Locarek-Junge

Author

Listed:
  • Susanne Homölle
  • Nikolas Höhnke
  • Ulf Hübenbecker
  • Philipp Winskowski

Abstract

Social banks are expected to have excess liquidity issues, caused by the combination of massive growth of deposits and their self-restricted investment selection. In this study, we differentiated between social banks with moderate and those with strict self-restrictions. As strict social banks are expected to attract more depositors, excess liquidity issues might be a larger problem of this type of social bank. Comparing the development of deposits and excess liquidity indicators between both types based on a data set of 23 European social banks, we found that the deposits of strict social banks have indeed grown much stronger and that these banks show lower ability to transform deposits into impact assets. Moderate social banks seem to be able to easier compensate low loans-to-deposits ratios with suitable investments in shares and bonds. Liquidity surplus of (strict) social banks might decrease their efficiency, but does not seem to infringe their going concern.

Suggested Citation

  • Susanne Homölle & Nikolas Höhnke & Ulf Hübenbecker & Philipp Winskowski, 2022. "The Growth of Social Banks, Investment Restrictions, and Excess Liquidity Risk," World Scientific Book Chapters, in: Tony Klein & Sven Loßagk & Mario Straßberger & Thomas Walther (ed.), Modern Finance and Risk Management Festschrift in Honour of Hermann Locarek-Junge, chapter 5, pages 79-101, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781800611917_0005
    as

    Download full text from publisher

    File URL: https://www.worldscientific.com/doi/pdf/10.1142/9781800611917_0005
    Download Restriction: Ebook Access is available upon purchase.
    File URL: https://www.worldscientific.com/doi/abs/10.1142/9781800611917_0005
    Download Restriction: Ebook Access is available upon purchase.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:wschap:9781800611917_0005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscientific.com/page/worldscibooks .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.