INTEREST RATE METRIS SYSTEM: ALTERNATIVE STRATEGY FOR BANKING INDUSTRY

Stephanus Ivan Goenawan ()
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Stephanus Ivan Goenawan: Atma Jaya University

Bulletin of Monetary Economics and Banking, 2016, vol. 18, issue 4, 449-474

Abstract: The financial transaction facilities including Automated Teller Machine (ATM), mobile banking, or internet banking can help customers to make real time transactions across location and time zones. On the basis of these two facts, this research comparatively analyze and prove that the daily interest rate system as commonly practiced by the bank potentially create loss to them. Since the daily interest rate system is based on the change of the date, the customers can double the nominal interest rate income. Using comparative analysis, this paper shows that the potential loss may be prevented when the bank use the metris interest rate system, which is based on the time in seconds.

Keywords: Interest rate system; metris system; interest rate policy (search for similar items in EconPapers)
JEL-codes: G21 G28 G38 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:18:y:2016:i:4d:p:449-474

DOI: 10.21098/bemp.v18i4.576

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