A Theoretical and Empirical Analysis of Interest rate pass-through in India with Regulatory Requirements

Jugnu ANSARİ

Makale detayları

A Theoretical and Empirical Analysis of Interest rate pass-through in India with Regulatory Requirements

Yazarlar:

Jugnu ANSARİ

Yayıncı:

Beykent University

Dergi:

Beykent Üniversitesi Sosyal Bilimler Dergisi 2013 Vol.6 Issue 2, pp.0-0

Belge Tipi:

Makale

Yayın Tarihi:

5/2013

Belge Dili:

Türkçe

Document ID (Org No.):

2000890821

Sıklık:

Aylık

eISSN:

2667-4955

pISSN:

1307-5063

Özet:

 

Özet: This study provides a theoretical and empirical analysis of optimal loan pricing by the commercial banks in a regulated  environment that could relate to some developing and emerging market economies. Regulatory requirements could impinge on  banks’ balance sheet and thus, influence their optimal loan pricing response to the policy rate. In such a situation, for an effective  transmission mechanism through the interest rate channel, a calibrated approach may be required; changes in the policy rate to be  accompanied by changes in the regulatory parameters to achieve desired changes in the banks’ lending rate. Theoretical analysis  brought to the fore various critical insights. Three major insights are as follows. First, there can be a trade-off between regulation  and effectiveness of transmission mechanism and competitiveness of the loan market. Second, theoretically it is possible for banks to  engage in subsidisation of loans against investment in risk free government securities. Third, the capital market could be linked to  monetary transmission mechanism if banks were subject to a required return on their capital base. These theoretical perspectives  have implications for bank regulation and policy purposes.

 

Özet: This study provides a theoretical and empirical analysis of optimal loan pricing by the commercial banks in a regulated  environment that could relate to some developing and emerging market economies. Regulatory requirements could impinge on  banks’ balance sheet and thus, influence their optimal loan pricing response to the policy rate. In such a situation, for an effective  transmission mechanism through the interest rate channel, a calibrated approach may be required; changes in the policy rate to be  accompanied by changes in the regulatory parameters to achieve desired changes in the banks’ lending rate. Theoretical analysis  brought to the fore various critical insights. Three major insights are as follows. First, there can be a trade-off between regulation  and effectiveness of transmission mechanism and competitiveness of the loan market. Second, theoretically it is possible for banks to  engage in subsidisation of loans against investment in risk free government securities. Third, the capital market could be linked to  monetary transmission mechanism if banks were subject to a required return on their capital base. These theoretical perspectives  have implications for bank regulation and policy purposes.

Makale detayları

A Theoretical and Empirical Analysis of Interest rate pass-through in India with Regulatory Requirements

Yazarlar: Jugnu ANSARİ

Yayıncı: Beykent University

Dergi: Beykent Üniversitesi Sosyal Bilimler Dergisi 2013 Vol.6 Issue 2, pp.0-0

Belge Tipi: Makale

Yayın Tarihi: 5/2013

Belge Dili: Türkçe

Document ID (Org No.): 2000890821

Sıklık: Aylık

eISSN: 2667-4955

pISSN: 1307-5063

Sayı

Yazarlar:

Jugnu ANSARİ

Yayıncı:

Beykent University

Dergi:

Beykent Üniversitesi Sosyal Bilimler Dergisi 2013 Vol.6 Issue 2, pp.0-0

Belge Tipi:

Makale

Yayın Tarihi:

5/2013

Belge Dili:

Türkçe

Document ID (Org No.):

2000890821

Sıklık:

Aylık

eISSN:

2667-4955

pISSN:

1307-5063