IDEAS home Printed from https://ideas.repec.org/p/fth/pennfi/12-79.html
   My bibliography  Save this paper

Competition and Interest Rate Ceilings in Commerical Banking

Author

Listed:
  • Richard Startz

Abstract

Regulations prohibiting the payment of explicit interest on demand deposits are gradually being eased. As banks switch from payment in the form of free services to explicit interest, both the level of money demand and the response of money demand to market interest rates will change. Banks are modeled here as being Chamberlinian monopolistic competitors. Equilibrium deposit interest rate relationships are found for markets both with and without an effective interest rate ceiling and the behavior of the two markets is compared. The elimination of deposit interest rate ceilings leads to increased money demand and an increased responsiveness of deposit rates to market interest rates.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Richard Startz, "undated". "Competition and Interest Rate Ceilings in Commerical Banking," Rodney L. White Center for Financial Research Working Papers 12-79, Wharton School Rodney L. White Center for Financial Research.
  • Handle: RePEc:fth:pennfi:12-79
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Corvoisier, Sandrine & Gropp, Reint, 2002. "Bank concentration and retail interest rates," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2155-2189, November.
    2. Chateau, Jean-Pierre D., 1990. "Financement dynamique des intermédiaires financiers : l’effet de la volatilité du taux de crédit sur les dépôts de base," L'Actualité Economique, Société Canadienne de Science Economique, vol. 66(1), pages 50-64, mars.
    3. Michael C. Keeley & Gary C. Zimmerman, 1985. "Competition for money market deposit accounts," Economic Review, Federal Reserve Bank of San Francisco, issue Spr, pages 5-27.
    4. David VanHoose, 2013. "Implications of Shifting Retail Market Shares for Loan Monitoring in a Dominant-Bank Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(3), pages 291-316, July.
    5. Pinho, Paulo Soares de, 2000. "The impact of deregulation on price and non-price competition in the Portuguese deposits market," Journal of Banking & Finance, Elsevier, vol. 24(9), pages 1515-1533, September.
    6. Glennon, Dennis & Lane, Julia, 1996. "Financial innovation, new assets, and the behavior of money demand," Journal of Banking & Finance, Elsevier, vol. 20(2), pages 207-225, March.
    7. Insfrán Pelozo, José Ani­bal, 2008. "Loans, risks, and growth: The role of government and public banking in Paraguay," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 307-319, May.
    8. Dutkowsky, Donald H. & VanHoose, David D., 2013. "Interest on reserves, unregulated interest on demand deposits, and optimal sweeping," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 192-202.
    9. Tarkka, Juha, 1994. "Risk sharing in the pricing of payment services by banks," Research Discussion Papers 18/1994, Bank of Finland.

    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:fth:pennfi:12-79. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel). General contact details of provider: http://edirc.repec.org/data/rwupaus.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.