TY - JOUR
T1 - The impact of financial regulation on the stickiness of credit card lending rate
T2 - evidence from the USA
AU - Liu, Ming Hua
AU - Liu, Tianyun
AU - Shrestha, Keshab
AU - Zhang, Yang
PY - 2021/11
Y1 - 2021/11
N2 - We examine the effect of the U.S. Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 on the credit card lending rate pass-through. Our findings show that the Act had no impact on the long-term relationship between the lending rate and funding costs. However, in the short-term, banks were quicker to raise rates in response to an increase in funding costs after the implementation of the CARD Act. Our study shows that financial regulations can have unintended consequences.
AB - We examine the effect of the U.S. Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 on the credit card lending rate pass-through. Our findings show that the Act had no impact on the long-term relationship between the lending rate and funding costs. However, in the short-term, banks were quicker to raise rates in response to an increase in funding costs after the implementation of the CARD Act. Our study shows that financial regulations can have unintended consequences.
KW - CARD Act
KW - Cost of funds
KW - Error correction model
KW - Lending rates
KW - U.S. credit card industry
UR - http://www.scopus.com/inward/record.url?scp=85103660526&partnerID=8YFLogxK
U2 - 10.1007/s11156-021-00975-4
DO - 10.1007/s11156-021-00975-4
M3 - Article
AN - SCOPUS:85103660526
VL - 57
SP - 1195
EP - 1213
JO - Review of Quantitative Finance and Accounting
JF - Review of Quantitative Finance and Accounting
SN - 0924-865X
IS - 4
ER -