Determinants of commercial bank retail interest rate adjustments: Evidence from a panel data model

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This paper examines the determinants of commercial bank retail interest rate pass-through. While providing empirical evidence for interest rate pass-through across countries, based on a panel data model for 122 countries, we observe that retail interest rate adjustment is related to a number of macroeconomic, financial/banking as well as institutional/governance factors. Amongst these, the level of financial market development, banking sector market power and central bank transparency remain key factors. These results are robust for different sub-samples of countries accounting for cross-country heterogeneity and provide important policy implications for central banks in the conduct of monetary policy.
Original languageEnglish
Pages (from-to)1-20
Number of pages20
JournalJournal of International Financial Markets, Institutions and Money
Volume45
DOIs
Publication statusPublished - 1 Nov 2016

Keywords

  • GMM estimates
  • Monetary policy transmission
  • Panel data
  • Retail interest rates

Cite this

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title = "Determinants of commercial bank retail interest rate adjustments: Evidence from a panel data model",
abstract = "This paper examines the determinants of commercial bank retail interest rate pass-through. While providing empirical evidence for interest rate pass-through across countries, based on a panel data model for 122 countries, we observe that retail interest rate adjustment is related to a number of macroeconomic, financial/banking as well as institutional/governance factors. Amongst these, the level of financial market development, banking sector market power and central bank transparency remain key factors. These results are robust for different sub-samples of countries accounting for cross-country heterogeneity and provide important policy implications for central banks in the conduct of monetary policy.",
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Determinants of commercial bank retail interest rate adjustments : Evidence from a panel data model. / Perera, Anil; Wickramanayake, Jayasinghe.

In: Journal of International Financial Markets, Institutions and Money, Vol. 45, 01.11.2016, p. 1-20.

Research output: Contribution to journalArticleResearchpeer-review

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