Determinants of interest rate pass-through

16 Nov 2017 Lower lending interest rates of banks provide a boost to demand for bank Overall, data suggests that the pass-through from policy rate changes to In practice, the flexibility accorded to banks in the determination of cost of 

Structural and cyclical determinants of bank interest rate pass-through in Eurozone Aur elien Leroy and Yannick Lucottey Abstract This paper empirically investigates the evolution and the sources of interest rate pass-through heterogeneity in the Eurozone for a sample of 11 euro area coun-tries over the period 2003M1-2011M12. "Structural and Cyclical Determinants of Bank Interest-Rate Pass-Through in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 196-225, June. Aurélien Leroy & Yannick Lucotte, 2016. "Structural and Cyclical Determinants of Bank Interest-Rate Pass-Through in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 196-225, June. Several arguments in the literature explain the sluggish and incomplete monetary transmission process, for example, on the basis the rigidity of bank costs (Enfrun and Cordier, 1994), the consumer aversion to pay variable interest rates (Borio and Fritz, 1995), competition from direct finance (Mojon, 2000) or the lack of competition in the banking sector (Borio and Fritz, 1995).

Aurélien Leroy & Yannick Lucotte, 2016. "Structural and Cyclical Determinants of Bank Interest-Rate Pass-Through in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 196-225, June.

Focusing on the determinants of interest rate pass-through, Gigineishvili (2011) finds that per capita GDP, inflation, exchange rate flexibility, credit quality, and banking competition strengthen Since these rates move together, the term interest rate means any bank lending rate. Or, interest rate means any rate a lender charge, as a percentage of the principal, to anyone who borrows or use an asset. Interest rates are normally calculated on annual basis known as the annual percentage rate (APR). Structural and cyclical determinants of bank interest rate pass-through in Eurozone Aur elien Leroy and Yannick Lucottey Abstract This paper empirically investigates the evolution and the sources of interest rate pass-through heterogeneity in the Eurozone for a sample of 11 euro area coun-tries over the period 2003M1-2011M12. "Structural and Cyclical Determinants of Bank Interest-Rate Pass-Through in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 196-225, June. Aurélien Leroy & Yannick Lucotte, 2016. "Structural and Cyclical Determinants of Bank Interest-Rate Pass-Through in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 196-225, June. Several arguments in the literature explain the sluggish and incomplete monetary transmission process, for example, on the basis the rigidity of bank costs (Enfrun and Cordier, 1994), the consumer aversion to pay variable interest rates (Borio and Fritz, 1995), competition from direct finance (Mojon, 2000) or the lack of competition in the banking sector (Borio and Fritz, 1995).

change their rate setting behaviour after the financial crisis: interest rate pass- and relate the disconnect to changes in the demand and supply determinants of In this framework, pass through occurs between the weighted average cost of.

Economic Institute. Warsaw, 2015. NBP Working Paper No. 198. Structural and cyclical determinants of bank interest rate pass-through in Eurozone. Aurélien  Numerical estimates of pass-through coefficients diverge significantly across countries, markets, and time periods, implying that retail interest rates by commercial  In this environment, retail loan rates are not necessarily the same across firms. The commercial banks' problem for loan rate determination is specified as Calvo-   We examine the pass-through mechanism using a unique data set of Czech loan and deposit products and focus on bank-level determinants of pricing policies, 

Banks typically adjust their interest rates with regard to general market developments but research has found that this interest rate pass-through from market 

Focusing on the determinants of interest rate pass-through, Gigineishvili (2011) finds that per capita GDP, inflation, exchange rate flexibility, credit quality, and banking competition strengthen Since these rates move together, the term interest rate means any bank lending rate. Or, interest rate means any rate a lender charge, as a percentage of the principal, to anyone who borrows or use an asset. Interest rates are normally calculated on annual basis known as the annual percentage rate (APR). Structural and cyclical determinants of bank interest rate pass-through in Eurozone Aur elien Leroy and Yannick Lucottey Abstract This paper empirically investigates the evolution and the sources of interest rate pass-through heterogeneity in the Eurozone for a sample of 11 euro area coun-tries over the period 2003M1-2011M12. "Structural and Cyclical Determinants of Bank Interest-Rate Pass-Through in the Eurozone," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 196-225, June.

It uses a wide range of macroeconomic and financial market structure variables to uncover structural determinants of pass-through. The paper finds that per capita GDP and inflation have positive effects on pass-through, while market volatility has a negative effect.

Results of prior research on interest rate determinants are mixed. Acharya and Is Exchange Rate Pass-Through In Pork Meat Export Prices. Constrained By 

tion”, Working Paper WP/13/23, IMF, 2013, and Gigineishvili, N., “Determinants of interest rate pass-through: Do macroeconomic condi- tions and financial  Official interest rate changes should influence short rates on money market instruments and find complete pass-through in mortgage rates for UK building societies. be important determinants of the speed of equilibrium adjustment. We. financial-reform interest rate pass through for Indian banks after controlling for all these factors, we estimate the determinants of commercial banks’ loan