Plausibly Exogenous [1717] - Financial Sophistication (10/15/2024)
LHS Variable
Bank funding costs
RHS Variable
Financial sophistication of bank customers
Source of Exogenous Variation
Cross-sectional variation across banks in the frequency of inconsistent pricing (many banks offer term structures of CD rates in which the rates for some tenors are actually dominated.)
- Fleckenstein and Longstaff (2024), “Financial Sophistication and Bank Market Power”