Interest Rates

T. J. Gough

Chapter 5 in The Economics of Building Societies, 1982, pp 65-80 from Palgrave Macmillan

Abstract: Abstract It has been said that the operation of building societies can be described in essence by their characteristic of borrowing at short term and lending long term. Modern developments in building society practices make this an over-simplification. For example, much of the growth in investment recently has come from term shares where the society is effectively borrowing for a much longer period (up to 5 years) compared to the ordinary share account. Likewise, although mortgages are contractually over a long period, they generally get repaid far more quickly, as people change houses; also some of the lending does not go on mortgages and is held in liquid form, some of this at very short notice. Despite these qualifications it is still broadly true to say that the majority of their business is still centred on borrowing short and lending long.

Keywords: Interest Rate; Saving Rate; Excess Demand; Cost Curve; Marginal Revenue (search for similar items in EconPapers)
Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-05673-6_5

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DOI: 10.1007/978-1-349-05673-6_5

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