Monetary Policy Implications on Banking Conduct and Bank Clients’ Behavior

Eleni Dalla, Christos Karpetis () and Erotokritos Varelas

Atlantic Economic Journal, 2014, vol. 42, issue 4, 427-440

Abstract: Using a two-stage Cournot game with economies of scope, we examine the effects of monetary policy on the optimal bank behavior. Emphasis is on the way the interest rate spread is influenced by the minimum reserve requirements. It is demonstrated that the sign of this effect depends on the kind of economies of scope. Moreover, monetary policy implications for both the depositor’s and borrower’s behaviors are presented. Assuming an overlapping generation context, we prove that minimum reserve requirements affect the optimal levels of bank-client consumption through the corresponding equilibrium interest rates. Copyright International Atlantic Economic Society 2014

Keywords: Bank behavior; Economies of scope; Reserve requirements; Substitution effect; Income effect; D11; E52; G21; L13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11293-014-9425-3 (text/html)
Access to full text is restricted to subscribers.

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:kap:atlecj:v:42:y:2014:i:4:p:427-440

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11293/PS2

DOI: 10.1007/s11293-014-9425-3

Access Statistics for this article

Atlantic Economic Journal is currently edited by Kathleen S. Virgo

More articles in Atlantic Economic Journal from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().