Bank Behavior in Oligopoly, Bank- Clients and Monetary Policy
This paper investigates the impact of monetary policy on the optimal bank behavior under oligopolistic conditions. In addition, we attempt to extend this analysis in the sphere of bank-clients behavior.We concentrate on the way the minimum reserve requirements of commercial banks influence the optimal bank behavior in oligopoly. In particular, we are interested in the influence of this instrument of monetary policy on the interest rate spread. For this reason, we formulate a two-stage Cournot game with scope economies.We conclude that the sign of each change depends on the type of scope economies. Finally, treating an overlapping generation model as a guiding principle, we show that the minimum reserve requirements of commercial banks have an impact on the depositors’ and borrowers’ two periods’ optimal level of consumption.
|Date of creation:||30 Jun 2013|
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- Toolsema-Veldman, Linda A. & Schoonbeek, Lambert, 1999. "Bank behavior and the interbank rate in an oligopolistic market," CCSO Working Papers 199909, University of Groningen, CCSO Centre for Economic Research.
- Shota Yamazaki & Hiroaki Miyamoto, 2004. "A Note on Bank Behavior and Monetary Policies in an Oligopolistic Market," Industrial Organization 0408003, EconWPA.
- Toolsema, Linda A. & Schoonbeek, L., 1999. "Bank behavior and the interbank rate in an oligopolistic market," Research Report 99E49, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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