Document Type

Article

Journal/Book Title/Conference

Economics Research Institute Study Paper

Volume

4

Publisher

Utah State University Department of Economics

Publication Date

1999

First Page

1

Last Page

48

Abstract

We empirically examine interest rates established on the national market for insured thrift deposits during a period spanning passage of the Financial Institutions Reform, Recovery and Enhancement Act of 1989. Our analysis indicates that changes in the demand for funds by thrifts in periods of financial stress exerted a pronounced influence on the deposit rate premiums paid by thrifts over comparable Treasuries. This contrasts with the conventional wisdom that default risk is the primary systematic determinant of rate premiums.


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