IDEAS home Printed from https://ideas.repec.org/p/lie/opaper/43.html
   My bibliography  Save this paper

What drove the rise in bank lending rates in Lithuania during the low-rate era?

Author

Listed:
  • Jaunius Karmelavičius

    (Bank of Lithuania)

  • Ieva Mikaliūnaitė-Jouvanceau

    (Bank of Lithuania)

  • Andrius Buteikis

    (Bank of Lithuania)

Abstract

While Euro area interest rates were responding to accommodative monetary policy and 201519, in stark contrast, Lithuania’s bank lending rates increased. decreasing throughout Although the rates have slightly dropped around t he onset of the pandemic, they are still question, what were the elevated and well above the EA figures. This paper calls into drivers of such interest rate dynamics in Lithuania? By analysing the historical events and practical aspects of loan pricing in Lithuania’s banking industry, we build an empirical lending rate variation across banks, time and lending segments, and model that exploits maps it to different drivers of pricing. We find that the recent changes in lending rates in response to changes can be attributed to avera ge bank margins, which moved largely in market concentration.

Suggested Citation

  • Jaunius Karmelavičius & Ieva Mikaliūnaitė-Jouvanceau & Andrius Buteikis, 2022. "What drove the rise in bank lending rates in Lithuania during the low-rate era?," Bank of Lithuania Occasional Paper Series 43, Bank of Lithuania.
    • Handle: RePEc:lie:opaper:43
    as

    Download full text from publisher

    File URL: https://www.lb.lt/uploads/publications/docs/37049_e91aa397c79876858d295bfabb8d0222.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaunius Karmelavičius & Ieva Mikaliūnaitė-Jouvanceau & Austėja Petrokaitė, 2022. "Housing and credit misalignments in a two-market disequilibrium framework," Bank of Lithuania Occasional Paper Series 42, Bank of Lithuania.

    More about this item

    Keywords

    interest rates; loan pricing; banking; concentration; capital requirements;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • 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
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lie:opaper:43. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aurelija Proskute (email available below). General contact details of provider: https://edirc.repec.org/data/lbanklt.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.