Unsecured and Secured Funding

Mario Di Filippo, Angelo Ranaldo, Jan Wrampelmeyer*

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review


We study how individual banks borrow and lend in the euro unsecured and secured interbank market. We find that banks with lower credit worthiness replace unsecured with secured borrowing, which is consistent with a reduction in the supply of unsecured loans rather than a lower demand for funding. Riskier lenders replace unsecured with secured lending, suggesting that banks take precautionary measures and prefer to lend against safe collateral. Our results highlight the importance of a joint analysis of unsecured and secured funding. Separate analyses only give a partial view and might yield misleading conclusions when banks access both funding sources.

Original languageEnglish
Pages (from-to)651-662
Number of pages12
JournalJournal of Money, Credit and Banking
Issue number2-3
Publication statusPublished - Apr 2022

Bibliographical note

Funding Information:
We thank participants of the 25th Annual Meeting of the German Finance Association, the 2016 Maastricht Workshop for Advances in Quantitative Economics, the Sinergia Conference at Rigi Kaltbad, and research seminars at BaFin, Deutsche Bundesbank, Lund University, Swiss National Bank, University of Geneva, University of Tilburg, and University of Zurich for helpful comments. The research presented in this paper was conducted when Mario di Filippo was an economist at Banque de France, as a member of one of the user groups with access to TARGET2 information (which is one of the data sets used in this paper) in accordance with Article 1(2) of Decision ECB/2010/9 of July 29, 2010, on access to and use of certain TARGET2 data. The views expressed in this paper are solely those of the authors. Moreover, the authors are grateful to Eurex Repo GmbH for providing the repo data and to René Winkler and Florian Seifferer for helpful comments and insightful discussions. This work was supported by the Sinergia grant “Empirics of Financial Stability” from the Swiss National Science Foundation (154445).

Publisher Copyright:
© 2021 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals LLC on behalf of Ohio State University.

Copyright 2021 Elsevier B.V., All rights reserved.


  • counterparty credit risk
  • funding risk
  • interbank market
  • repurchase agreements
  • unsecured funding

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