Determinants of Belgian bank lending intrest rates
AbstractThis article first reviews the main determinants of bank loans’ interest rates and offers a brief discussion of the impact of capital requirements on interest rate margins. Next, it presents some empirical evidence, first, on the pass-through of the central bank rate to market rates and, subsequently, on the pass-through of market rates to retail interest rates using survey data for Belgian credit institutions. As predicted by economic theory, the size and significance of the pass-through of monetary policy impulses to market rates falls quickly with maturity. However, the long run pass-through remains almost complete for maturities lower or equal to one year. Belgian banks seem to adjust more quickly and more fully their retail interest rates on credit to enterprises than those on credit to households. With the exception of consumer loans, the long-term pass-through proves to be above 80 percent. Finally, this article goes into the first results of the new interest rates survey. Banks with a relatively high degree of capital coverage are found to ask higher lending rates and are probably granting riskier loans. Liquid banks and large banks generally set lower lending rates. Belgian firms and households are facing lending conditions broadly similar to those prevailing in the euro area.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by National Bank of Belgium in its journal Economic Review.
Volume (Year): (2004)
Issue (Month): III (September)
Contact details of provider:
Postal: Boulevard de Berlaimont 14, B-1000 Bruxelles
Phone: (+ 32) (0) 2 221 25 34
Fax: (+ 32) (0) 2 221 31 62
Web page: http://www.nbb.be/
More information through EDIRC
Pass-through; Banks; Determinants of lending interest rates;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.