Monetary Policy Transmission in Digital-changing Landscapes: The Intersection of Interest Rates and Financial Stability

Ashot V Mardoyan and Hayk A Sargsyan
Additional contact information
Ashot V Mardoyan: Armenian State University of Economics (Yerevan, RA), Armenia.
Hayk A Sargsyan: Armenian State University of Economics (Yerevan, RA), Armenia.

Post-Print from HAL

Abstract: This study examines how monetary policy transmission is changing as central banks move from the synchronised tightening of 2022–2023 towards increasingly divergent policy settings. A systematic comparative policy analysis is applied to institutional and macroeconomic evidence from 14 jurisdictions, drawing on central bank interest-rate dynamics, fiscal projections, regional forecasts, and indicators of financial stability. The analysis distinguishes structural supply-side shocks from market-driven volatility and assesses whether institutional digital readiness affects the speed and reliability of policy pass-through. The findings indicate that economies with greater digital banking integration may transmit policy-rate changes more rapidly to retail credit conditions. However, this transmission can be weakened by geopolitical instability, elevated public debt, limited fiscal space, and institutional constraints. Comparative evidence from the United States, the United Kingdom, Japan, and selected developed and emerging economies also shows that central banks are no longer operating within a uniform global policy cycle. Instead, monetary authorities face a volatility channel in which local financial structures and external shocks alter the effects of interest-rate decisions. The study concludes that interest-rate policy alone is insufficient for sustaining financial stability in a digitally transforming financial system. A more integrated framework is required, combining adaptable monetary communication, institutional digital readiness, and robust macroprudential capital standards to strengthen resilience and support stable economic adjustment.

Date: 2026-07-20
References: Add references at CitEc
Citations:

Published in Asian Journal of Advanced Research and Reports, 2026, 20 (8), pp.12-23

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05699082

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().