Document Type

Article

Publication Date

2006

Keywords

Window dressing, Preferred habitat

Abstract

Allen and Saunders (1992) document abnormal behavior of bank assets and liabilities at the turn-of-the-quarter and attribute it to window dressing by banks. Using different methods we re-visit bank turn-of-the-quarter balance sheet activity. We also examine quarter-end changes in the effective fed funds rates and fed funds rate standard deviations. We confirm the presence of turn-of-the-quarter activity on bank balance sheets and in the fed funds market. However, we conclude that the turn-of-the-quarter effects are more consistent with customer preferred habitats than window dressing.

Comments

This article was originally published in Journal of Financial Services Research 29 (2006): 61-82. https://link.springer.com/article/10.1007/s10693-005-5108-1.

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