Savings banks hold a higher amount of liquid assets for each unit of sight deposits than regulation requires, posits a new paper from the Bundesbank.

The research finds that this can be explained by the fact that banks report the amount of sight deposits available at the end of the month and that monthly averages might be lower. The research also notes that that savings banks with high lending to non-banks relative to total assets do not only have fewer liquid assets but do also hold a smaller