IDEAS home Printed from https://ideas.repec.org/p/boe/boeewp/22.html
   My bibliography  Save this paper

A Model of Building Society Interest Rate Setting

Author

Listed:
  • Joanna Paisley

Abstract

This paper examines the interest rate setting behaviour of building societies since the breakdown of the interest rate cartel in 1984. Societies have faced increasing competition in the mortgage and savings market over this period, against a backdrop of radical regulatory change. The paper develops a profit-maximising model of societies on which econometric analysis is based. The empirical analysis indicates that libor drives the pricing on both sides of the balance sheet. The performance of the estimated equations was good, given the regulatory and behavioural change of the institutions and the turbulence of the housing market over this period. It is interesting that real side variables - such as house price volatility and unemployment - were found to be insignificant.

Suggested Citation

  • Joanna Paisley, 1994. "A Model of Building Society Interest Rate Setting," Bank of England working papers 22, Bank of England.
  • Handle: RePEc:boe:boeewp:22
    as

    Download full text from publisher

    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1994/wp22.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anderson, Gordon J & Hendry, David F, 1984. "An Econometric Model of United Kingdom Building Societies," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 46(3), pages 185-210, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Neil R. Ericsson, 2021. "Dynamic Econometrics in Action: A Biography of David F. Hendry," International Finance Discussion Papers 1311, Board of Governors of the Federal Reserve System (U.S.).
    2. Emilio Fernandez-Corugedo & John Muellbauer, 2006. "Consumer credit conditions in the United Kingdom," Bank of England working papers 314, Bank of England.
    3. Geoffrey P. Meen, 1989. "The Ending of Mortgage Rationing and its Effects on the Housing Market: A Simulation Study," Urban Studies, Urban Studies Journal Limited, vol. 26(2), pages 240-252, April.
    4. Julia Campos & Neil R. Ericsson & David F. Hendry, 2005. "General-to-specific modeling: an overview and selected bibliography," International Finance Discussion Papers 838, Board of Governors of the Federal Reserve System (U.S.).
    5. Neil R. Ericsson, David F. Hendry & Kevin M. Prestiwch, "undated". "The UK Demand for Broad Money over the Long run," Economics Papers W29, Economics Group, Nuffield College, University of Oxford.
    6. Neil R. Ericsson & David F. Hendry & Kevin M. Prestwich, 1998. "The Demand for Broad Money in the United Kingdom, 1878–1993," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 289-324, March.
    7. Neil R. Ericsson & David F. Hendry, 1985. "Conditional econometric modelling : an application to new house prices in the United Kingdom," International Finance Discussion Papers 254, Board of Governors of the Federal Reserve System (U.S.).
    8. Janko, Zuzana, 2020. "On the relationship between the current account and the fiscal balance: The case of Canada," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).

    More about this item

    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:boe:boeewp:22. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: Digital Media Team (email available below). General contact details of provider: https://edirc.repec.org/data/boegvuk.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.