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How do banks set interest rates? Author info | Abstract | Publisher info | Download info | Related research | Statistics Gambacorta, Leonardo
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This paper studies cross-sectional differences in banks interest rates. It adds to the literature in two ways. First, it analyzes systematically the micro and macroeconomic factors that influence the price-setting behaviour of banks. Second, by using banks' prices (rather than quantities) it provides an alternative way of disentangling loan supply from loan demand shift in the "bank lending channel" literature. The results suggest that heterogeneity in the banking rates pass-through - depending on liquidity, capitalization and relationship lending - exists only in the short run.
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Article provided by Elsevier in its journal European Economic Review .
Volume (Year): 52 (2008)
Issue (Month): 5 (July)
Pages: 792-819
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Handle: RePEc:eee:eecrev:v:52:y:2008:i:5:p:792-819Contact details of provider: Web page: http://www.elsevier.com/locate/eer
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Giuseppe Marotta, 2006.
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Heterogeneity and monetary policy
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Other versions: Pierre-Richard Agénor & Peter J. Montiel, 2006.
"Credit Market Imperfections and the Monetary Transmission Mechanism Part I: Fixed Exchange Rates ,"
The School of Economics Discussion Paper Series
0628, Economics, The University of Manchester.
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Leonardo Gambacorta & Simonetta Iannotti, 2005.
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Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance)
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Other versions: Ippei Fujiwara & Yuki Teranishi, 2009.
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cahier_etudes_29, Central Bank of Luxembourg.
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Massimiliano Affinito & Fabio Farabullini, 2006.
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589, Bank of Italy, Economic Research Department.
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Pierre-Richard Agénor & Peter J. Montiel, 2006.
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Gianluca Di Lorenzo & Giuseppe Marotta, 2006.
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Heterogeneity and monetary policy
0602, Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica.
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Other versions: Coricelli, Fabrizio & Égert, Balázs & MacDonald, Ronald, 2006.
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8/2006, Bank of Finland, Institute for Economies in Transition.
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F. De Graeve & O. De Jonghe & R. Vander Vennet, 2004.
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Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium
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De Graeve, Ferre & De Jonghe, Olivier & Vennet, Rudi Vander, 2007.
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"Interest Rate Setting and the Colombian Monetary Transmission Mechanism ,"
Borradores de Economia
352, Banco de la Republica de Colombia.
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"Russian banks´ private deposit interest rates and market discipline ,"
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