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Banking market integration in the SADC countries: evidence from interest rate analyses

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  • M. J. Aziakpono
  • S. Kleimeier
  • H. Sander

Abstract

This study investigates the state, development and drivers of banking market integration in the member countries of the Southern African Development Community (SADC). A Principal Component Analysis (PCA) of national retail interest rates indicates increasing integration in loan and deposit markets. These integration processes are not developing uniformly and we can identify a convergence club. When investigating the interest rate pass-through from central bank onto retail rates for this convergence club, we find both, genuine and monetary-integration driven processes though the latter dominate. We thus conclude that a selective expansion of the Common Monetary Area (CMA) is possible.

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File URL: http://hdl.handle.net/10.1080/00036846.2011.583219
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 44 (2012)
Issue (Month): 29 (October)
Pages: 3857-3876

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Handle: RePEc:taf:applec:44:y:2012:i:29:p:3857-3876

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  1. Kremers, Jeroen J M & Ericsson, Neil R & Dolado, Juan J, 1992. "The Power of Cointegration Tests," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 325-48, August.
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Cited by:
  1. Jac C. Heckelman & Andrew T. Young, 2014. "How Global is Globalization?," Working Papers 14-08, Department of Economics, West Virginia University.
  2. Tinashe Harry Dumile Kambadza & Zivanemoyo Chinzara, 2012. "Returns Correlation Structure and Volatility Spillovers Among the Major African Stock Markets," Working Papers 305, Economic Research Southern Africa.

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