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Interest Rate Metris System: Alternative Strategy For Banking Industry

Author

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  • Stephanus Ivan Goenawan

    (Atma Jaya University)

Abstract

The financial transaction facilities including Automated Teller Machine (ATM), mobile banking, or internet banking can help customers to make real time transactions across location and time zones. On the basis of these two facts, this research comparatively analyze and prove that the daily interest rate system as commonly practiced by the bank potentially create loss to them. Since the daily interest rate system is based on the change of the date, the customers can double the nominal interest rate income. Using comparative analysis, this paper shows that the potential loss may be prevented when the bank use the metris interest rate system, which is based on the time in seconds.

Suggested Citation

  • Stephanus Ivan Goenawan, 2016. "Interest Rate Metris System: Alternative Strategy For Banking Industry," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 18(4), pages 1-26, April.
    • Handle: RePEc:idn:journl:v:18:y:2016:i:4d:p:1-26
    DOI: https://doi.org/10.21098/bemp.v18i4.576
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    More about this item

    Keywords

    Interest rate system; metris system; interest rate policy;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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