THE CONNECTION BETWEEN BANK AND INTERBANK INTEREST RATES

Gabriel Bistriceanu
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Gabriel Bistriceanu: Bucharest Academy of Economic Studies

Theoretical and Applied Economics, 2009, vol. 12(541)(supplement), issue 12(541)(supplement), 657-664

Abstract: Interbank interest rates are the main determinant of interest rates practiced by banks on deposits and loans of households and non-financial corporations customers. In Romania, the empiric optimum of connection between interest rates of deposits and loans and the interbank interest rates is differing from 1, because of the following main factors: weak money market turnover, Romanian banking system having concentration higher than moderate to a certain extent and low financial intermediation degree, credit, liquidity and interest rate risks, maturity of bank products, fixity or variability of banks interest rates, banks perception on monetary policy and interbank interest rates modification.

Keywords: interbank interest rate; loans interest rate; deposits interest rate; connnection; optimum. (search for similar items in EconPapers)
Date: 2009
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