This paper follows up on recent studies of the Eurozone interest rate pass-through. Using a generalized empirical approach that allows for a variety of different specifications of the pass-through, including asymmetric adjustment, the role of interest rate expectations, proxied by EURIBOR futures, in determining retail banking product pricing is explored. It is shown that the pass-through is fa...

one of the present phenomena that virtually explain weaknesses in financial systems of different countries is financial repression. financial repression encompasses the different interferences of governments in financial markets through determining the ceiling interest on bank deposits, high rates of legal reserves, and the government’s interference in distribution of bank credits,which prevent...

The interest rates that banks pay on deposits move more slowly than money-market interest rates, a phenomenon documented in several recent studies (Flannery [1982], Hannan and Berger [1991], and Neumark and Sharpe [1992]). Understanding deposit-rate sluggishness has important direct consequences for comprehending money demand and bank profitability, as well as indirect consequences for understa...

In this paper, we seek to provide a framework for comparing certificates of deposit (CD) products that vary in their features. There are now fixed-rate CDs with no early withdrawal penalties as well as floating-rate CDs with guaranteed floors. With the model developed here, we examine the required change in the effective annual rate required in basis points to make CD products with embedded der...