Why did banks experience massive deposit inflows during the pandemic? We discover that deposit interest rates at bank branches in counties with higher COVID-19 infection rates fell by more than rates at branches—even branches of the same bank—in counties with lower infection rates. Credit drawdowns, national policies, such as the Payment Protection Program, and a flight-to-safety do not account for these cross-branch changes in deposit rates. Evidence suggests that higher local COVID-19 infection rates are associated with households’ greater anxiety about future job and income losses, anxiety that induces households to reduce spending and increase deposits.
- Ph.D. in Business Economics, Harvard University
- Master and Bachelor degrees in Finance, Tsinghua University
Mingzhu TAI joined HKU after receiving her Ph.D in Business Economics from Harvard University in 2017. Before that she received her Master and Bachelor degrees in Finance from Tsinghua University.
Mingzhu’s research interests mainly include consumer and household finance, financial intermediation and general corporate finance. She is currently working to understand the relationship between banks, real estate markets, financial regulations, and credit activities by consumers and businesses.
- Consumer and household finance
- Financial intermediation
- Corporate finance
- Behavioral finance
- “How Did Depositors Respond to COVID-19?”, with Ross Levine, Chen Lin, and Wensi Xie, The Review of Financial Studies, 2021, 34(11), 5438-5473.