Bank interest rates in a small European economy: Some exploratory macro level analyses using Finnish data
AbstractThis paper presents econometric analyses on the determination of bank deposit and lending rates using longitudinal Finnish data. Interest rate pass-through is very strong, possibly complete, in the case of lending rates; in the case of deposit rates the pass-through is far from complete, even in the long term. The monetary union has benefited customers by decreasing the average rate on new loans. Credit and interest rate risk premiums are clearly observable in banks' lending rates. The impact of money market rates on loan stock rates seems to have been non-linear; no obvious explanation for this phenomenon has been found.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 0508020.
Length: 48 pages
Date of creation: 31 Aug 2005
Date of revision:
Note: Type of Document - pdf; pages: 48. Bank of Finland Research Discussion Papers 9/2005
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G21; E43; E44;
Other versions of this item:
- Kauko , Karlo, 2005. "Bank interest rates in a small European economy: Some exploratory macro level analyses using Finnish data," Research Discussion Papers 9/2005, Bank of Finland.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-09 (All new papers)
- NEP-FIN-2005-11-09 (Finance)
- NEP-FMK-2005-11-09 (Financial Markets)
- NEP-IFN-2005-11-09 (International Finance)
- NEP-MAC-2005-11-09 (Macroeconomics)
- NEP-MON-2005-11-09 (Monetary Economics)
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