When Information Is Disclosed, How Does The Large Market Work?

Unlike the open retail sector, the market for large bank deposits has traditionally operated through private channels between banks and firms. This opacity impedes efficiency for market participants and makes the market empirically challenging to study due to data scarcity. We address this lack of empirical work by analyzing a unique dataset from an online deposit platform characterized by banks' transparent pricing and active firm-side selection. Our results provide new evidence on the dynamics of large deposit markets, showing that risk and return trade-offs govern market behavior: bank risk-levels dictate both pricing and deposit flows, and firms actively diversify across banks offering attractive rates. These findings suggest that innovative centralized platforms, by enhancing price transparency and access, can significantly reduce market frictions.