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Bank interest rates in a small European economy: Some exploratory macro level analyses using Finnish data

Karlo Kauko

Finance from University Library of Munich, Germany

Abstract: This paper presents econometric analyses on the determination of bank deposit and lending rates using longitudinal Finnish data. Interest rate pass-through is very strong, possibly complete, in the case of lending rates; in the case of deposit rates the pass-through is far from complete, even in the long term. The monetary union has benefited customers by decreasing the average rate on new loans. Credit and interest rate risk premiums are clearly observable in banks' lending rates. The impact of money market rates on loan stock rates seems to have been non-linear; no obvious explanation for this phenomenon has been found.

Keywords: G21; E43; E44 (search for similar items in EconPapers)
JEL-codes: G21 E43 E44 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2005-08-31
New Economics Papers: this item is included in nep-fin, nep-fmk, nep-ifn, nep-mac and nep-mon
Note: Type of Document - pdf; pages: 48. Bank of Finland Research Discussion Papers 9/2005
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https://econwpa.ub.uni-muenchen.de/econ-wp/fin/papers/0508/0508020.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpfi:0508020

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