scholarly journals Interest Rate Pass-Through in Poland Since the Global Financial Crisis

2016 ◽  
Author(s):  
Mariusz Kapuuciiski ◽  
Ewa Stanislawska
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Pass Through ◽  
The Global Financial Crisis

Financial Crisis and Interest Rate Pass-Through in Australia

2013 ◽  
Vol 16 (04) ◽  
pp. 1350023 ◽  
Author(s):  
Milind Sathye
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Oecd Country ◽  
Lending Rate ◽  
Pass Through ◽  
Using Data ◽  
The Global Financial Crisis ◽  
The Impact ◽  
The Relationship

The study contributes to the extant literature on interest rate pass-through in two ways. First, we examine the impact of the global financial crisis on the historical relationship between policy rate and the home lending rate. Second, we provide evidence from a hitherto unexplored OECD country (Australia) using data from recent years and provide new insights for advancing the pass-through literature. We found complete or near-complete pass-through in the money market rates and a statistically significant temporary change in the relationship between the policy rate and home lending rate since the onset of the financial crisis.

The Global Financial Crisis and Retail Interest Rate Pass-Through in Australia

2016 ◽  
Vol 19 (04) ◽  
pp. 1650026 ◽  
Author(s):  
Ming-Hua Liu ◽  
Dimitris Margaritis ◽  
Zhuo Qiao
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Small Business ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Small Business Lending ◽  
Lending Rates ◽  
Pass Through ◽  
The Global Financial Crisis ◽  
The Way

In this paper, we examine the impact of the global financial crisis (GFC) on the interest rate pass-through for four types of loans in Australia: mortgages, residentially secured small business lending, nonsecured small business lending and personal loans. Australia is an interesting case study since its central bank lowered but also raised interest rates during the GFC. We find that after the onset of the crisis, there has been a shift in the way banks adjust their lending rates in response to changes in market interest rates; the markup has increased and there has been a drop in both short- and long-term pass-through from funding costs to lending rates. Closer analysis indicates that the drop in short-term pass-through is due to the slower response of banks to increases in funding costs. We also find asymmetries in the way banks adjust lending rates in relation to funding costs in the long-run for nonsecured small business lending and personal loans. The evidence shows that banks in Australia tightened lending standards and competed less aggressively for loans but more for deposits in response to heightened default risks following the global financial crisis. The wider margin allows banks to adjust their lending rates more slowly and asymmetrically.

scholarly journals INTEREST RATE PASS-THROUGH IN LITHUANIA

Ekonomika ◽  
2011 ◽  
Vol 90 (2) ◽  
pp. 28-46 ◽  
Author(s):  
Vytenis Lapinskas
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Statistical Testing ◽  
Systemic Analysis ◽  
Rate Transmission ◽  
Pass Through ◽  
The Interest Rate ◽  
The Global Financial Crisis

The paper considers the pass-through of the interbank and retail interest rates for the case of Lithuania. The need for the interest rate transmission analysis has grown during the volatile market period caused by the global financial crisis. The objective of the article is to check theoretical and statistical aspects of domestic currency (litas) interest rate pass-through from interbank to retail interest rates and, specifically, to determine whether the recent global financial crisis has affected this process. Methods used in the article include a systemic analysis of related studies, historical data analysis and statistical testing. The analysis is expanded to cover the alternative interest rate-related variables in order to check the consistency of the pass-through of the litas interest rate over the period from October 2004 to December 2010. Results of the research show that though the lending interest rates have increased and the interest rate relationship has transformed over this period, there is no proof that changes in the bank interest rate setting policy has led to abnormal profits for banks.

scholarly journals Comparison of the Approach of the Czech National Bank and the European Central Bank to the Effects of the Global Financial Crisis

2021 ◽  
Vol 10 (2) ◽  
pp. 18-46
Author(s):  
Andrea Cecrdlova
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Central Bank ◽  
European Central Bank ◽  
Global Financial Crisis ◽  
Central Banks ◽  
European Central ◽  
National Bank ◽  
The Global Financial Crisis

The latest global crisis, which fully erupted in 2008, can have a significant impact on central banks credibility in the long run. During the last crisis, monetary authorities encountered zero interest rate levels and, as a result, started to use non-standard monetary policy instruments. The Czech National Bank decided to use a less standard instrument in November 2013, when it started to intervene on the foreign exchange market in order to keep the Czech currency at level 27 CZK / EUR. However, the European Central Bank also adopted a non-standard instrument, when chose a path of quantitative easing in 2015 in order to support the euro area economy by purchasing financial assets. The question remains whether the approach of Czech National Bank or the approach of European Central Bank in the crisis and post-crisis period was a more appropriate alternative. With the passage of time from the global financial crisis, it is already possible to compare the approaches of these two central banks and at least partially assess what approach was more appropriate under the given conditions. When comparing the central banks approaches to the crisis, the Czech National Bank was better, both in terms of the rate of interest rate cuts and the resulting inflation with regard to the choice of a non-standard monetary policy instrument. The recent financial crisis has revealed the application of moral hazard in practice, both on behalf of the European Central Bank and the Czech National Bank, which may have a significant impact on their credibility and independence in the coming years.

scholarly journals The Case against the New "Secular Stagnation Hypothesis"

2021 ◽  
Vol 24 (2) ◽  
pp. 219-253
Author(s):  
Mihai Macovei
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Explanatory Power ◽  
Bank Loan ◽  
Rate Theory ◽  
Natural Rate ◽  
Secular Stagnation ◽  
Natural Rate Of Interest ◽  
The Global Financial Crisis

The new “secular stagnation hypothesis” developed by Lawrence H. Summers attempts to justify why the demand stimulus applied in the aftermath of the global financial crisis failed to revive growth in a satisfactory manner. Building on previous ideas of Keynes, Hansen, and Bernanke, Summers claims that excess savings together with feeble investment drove the natural rate of interest down to zero and advanced economies into stagnation. As the US monetary policy rate is not allowed to fall below the zero bound, Summers calls for “quantitative easing” and more expansionary fiscal policy to spur investment demand. This paper refutes Summers’s hypothesis by revealing its internal inconsistencies and presenting both theoretical arguments and empirical evidence on the long-term evolution of savings, investment, productivity, and capital stock. It also estimates the natural rate of interest following the approach of Salerno (2020), which is further refined based on Rothbard’s “pure interest rate” theory. The calculation shows that the natural interest rate did not drop to zero after the global financial crisis, but has actually remained consistently and significantly above the federal funds rate and the bank loan prime rate. This not only invalidates Summers’s central claim, but confirms once more the explanatory power of the Austrian business cycle theory in relation to the main trigger of the global financial crisis and its subsequent unfinished recovery.

Determinants of Islamic Banking in Africa

2020 ◽  
pp. 174-188
Author(s):  
Sheereen Fauzel
Keyword(s):  
Growth Rate ◽  
Interest Rate ◽  
Financial Crisis ◽  
Religious Belief ◽  
Financial Services ◽  
Opportunity Cost ◽  
Global Financial Crisis ◽  
Islamic Banking ◽  
Muslim Population ◽  
The Global Financial Crisis

The global financial crisis of 2007-2008 depicted that conventional banking has many weaknesses. Hence, there has been much debate on the strength of Islamic banking to confront such crises. There are various advantages of using Shari'ah-compliant financial products pointed out by researches. Moreover, people who abide by their religious belief are mainly those who demand such financial services. But research relating to the determinants of Islamic banking is scant. This chapter examines the determinants of Islamic Banking in Africa over the period 2005-2018. The result shows that if the share of the Muslim population is high compared to other religions, Islamic banking is better diffused. Furthermore, important determinants of Islamic banking obtained from the results are the growth rate of the country and the extent to which the financial system is developed. Interestingly, it is observed that interest rate affects the diffusion of Islamic banking as it represents an opportunity cost.

scholarly journals Analysis of Interest Rate Impact on the Profitability Level of the Banking System in Albania during the Period 2005 -2014

2015 ◽  
Vol 3 (1) ◽  
pp. 203
Author(s):  
Sokol Ndoka ◽  
Anilda Bozdo
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
Banking System ◽  
The Other ◽  
Factors Affecting ◽  
The Interest Rate ◽  
The Global Financial Crisis ◽  
The Impact

This study is an analysis of the movement and impact of interest rates on the profitability level of the banking system in Albania. This analysis covers a 10-year timeframe (is organized in three time segments - before, during and after the financial crisis), taking into consideration the critical point of the years 2008-2009 considered as the “peak” of the global financial crisis. Such separation is made in order to see the possible changes of each period of time and to identify the impact differences of this factor in each period of study. This study is based on the hypothesis that the decrease of the interest rate has positively affected the income increase from interest as a result of the impact of two factors, negative levels of Gaps and an increased level of spread toward the average assets. As a matter of fact, it has neutralized on a certain level the other risks such as that of the loan which has dominated over the other risks. This paper is based on an empirical study with secondary quantitative and qualitative data. This study provides a considerable contribution in the framework of identification of factors affecting the profitability of the banking system in Albania, namely in the context of interest rate; In addition, this study aims at highlighting the importance of open Gaps minimization for the efficient profitability increase of the financial system.

scholarly journals INTEREST RATE PASS-THROUGH IN TURKEY AND IMPACT OF GLOBAL FINANCIAL CRISIS: ASYMMETRIC THRESHOLD COINTEGRATION ANALYSIS

2012 ◽  
Vol 14 (1) ◽  
pp. 98-113 ◽  
Author(s):  
Ebru Yüksel ◽  
Kıvılcım Metin Özcan
Keyword(s):  
Interest Rate ◽  
Financial Crisis ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Aggregate Demand ◽  
Cointegration Analysis ◽  
Threshold Cointegration ◽  
Long Run ◽  
Short Run ◽  
Pass Through

This paper aims to investigate the interest rate pass-through of monetary policy rate to banking retail rates in Turkey by employing the asymmetric threshold autoregressive (TAR) and momentum threshold autoegressive (MTAR) procedures introduced by Enders and Siklos (2001). Over the period December 2001 to April 2011, the empirical results of asymmetric threshold cointegration analysis suggest that there exist significant and complete pass-through between policy rate and loan rates. Positive and negative departures from the equilibrium converge to long run path almost at the same speed. Pace of convergence is about two to three months for all loan rates. Policy rate has significant short run impact on loan rates. Our analysis revealed that there is no significant relationship between policy rate and bank deposit rates due to sluggish adjustment of deposit rates. Lastly, the speed and behavior of interest rate pass-through between policy rate and loan rates did not change when we encounter the effect of 2008 financial crisis. Having a banking sector dominated financial system in Turkey, the results suggest that banks adjust loan rates faster than deposit rates. This indicates that Central Bank can affect the consumption behavior of people, in other words aggregate demand through loan rates.

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