Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5089141 | Journal of Banking & Finance | 2013 | 20 Pages |
Abstract
The paper analyzes why households hold sizeable shares of their assets in cash at home rather than at banks - a phenomenon that is widespread in many economies but for which information is scarce. Using survey data from ten Central, Eastern and Southeastern European countries, I document the relevance of this behavior and show that cash preferences cannot be fully explained by whether people are banked or unbanked. The analysis reveals that a lack of trust in banks, memories of past banking crises and weak tax enforcement are important factors. Moreover, cash preferences are stronger in dollarized economies where a “safe” foreign currency serves as a store of value.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Helmut Stix,