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I am a Principal Economist in the Division of Financial Stability at the Federal Reserve Board and a Fellow of CESifo, Munich.
My research interests include International Trade, International Finance, and Financial Intermediation.
My email: t.schmidteisenlohr (at) gmail.com.
Link to my CV.
Updated: The Large Deposit Premium and the Redistribution of Depositor Compensation (with Daniel Dias)
CESifo Working Paper, New Version August 2026, download.
Previously circulated as "The Uninsured Deposit Premium" and "The Cost of Uninsured Deposits: Bargaining versus Risk"
First Version, August 2025.
The difference between deposit rates on large and small deposits in the United States increased by 400 basis points over the last four decades, co-moves strongly with the Fed Funds Rate, and substantially changed the distribution of depositor income.
Abstract
We provide the first long-run estimates of the Large Deposit Premium (LDP) --- the difference between the rates paid on large and small deposits by U.S. banks. The premium rises by over 400 basis points from its early-1990s trough to its 2022--23 peak, turning a discount on large deposits into a substantial premium, and increases 27 basis points per 100-basis-point rise in the federal funds rate. The LDP's rise is explained by proxies for depositor bargaining power rather than by bank risk. The repricing has large distributional effects, cutting small depositors' share of deposit compensation from 80 to 40 percent between 1990 and 2026.
New Paper: Trade Finance Use By Heterogeneous Firms (with Francesca de Nicola, Alexandros Ragoussis and Trang Thu Tran), CESifo Working Paper, March 2026, download.
Firm characteristics like size, productivity, age, multinational status and trading experience are key determinants of Letter of Credit use. Firm characteristics matter more for countries with weak rule of law and less information available.
Abstract
Letters of credit are a key trade finance instrument that covers more than 10 percent of global trade, with a notably larger role in low- and middle-income economies. Studying detailed trade data from Viet Nam, we document how letter of credit use varies with firm characteristics. We show that the probability of using a letter of credit is systematically lower for younger, smaller, and foreign-owned trading firms. Importers that are less diversified or have less trading experience are more likely to use letters of credit. Firm characteristics have the strongest effects in markets where information is scarce and enforcement is weak. These patterns are consistent with a model in which the ability to screen trading partners and the cost of bank intermediation vary with firm characteristics, and where a firm's screening ability and country institutions are substitutes. Any policy or intervention that aims at increasing the use of bank-intermediated trade finance will therefore need to take firm heterogeneity into account.
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