Bank interest rates in a small European economy : Some exploratory macro level analyses using Finnish data

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Title: Bank interest rates in a small European economy : Some exploratory macro level analyses using Finnish data
Author: Kauko, Karlo
Organization: Suomen Pankki
Department / Unit: Monetary Policy and Research Department
Series: Bank of Finland Research Discussion Papers
Series number: 9/2005
Year of publication: 2005
Publication date: 8.3.2005
Pages: 44 s.
Keywords: Suomi; korot; pankkitoiminta; talletukset; luotot;
JEL: G21; E43; E44
Abstract: This paper presents econometric analyses on the determination of bank deposit and lending rates using longitudinal Finnish data. Interest rate pass-through is very strong, possibly complete, in the case of lending rates; in the case of deposit rates the pass-through is far from complete, even in the long term.The monetary union has benefited customers by decreasing the average rate on new loans.Credit and interest rate risk premiums are clearly observable in banks' lending rates.The impact of money market rates on loan stock rates seems to have been non-linear; no obvious explanation for this phenomenon has been found. Key words: banking, interest rates JEL classification numbers: G21, E43, E44
Rights: https://helda.helsinki.fi/bof/copyright


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