search query: @author Harper, I. R. / total: 1
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| Author: | Eichberger, J. Harper, I. R. |
| Title: | On deposit interest rate regulation and deregulation. |
| Journal: | Journal of Industrial Economics
1989 : SEP, VOL. 38:1, p. 19-30 |
| Index terms: | DEPOSIT BANKS INTEREST RATES DEREGULATION FINANCIAL MODELS |
| Language: | eng |
| Abstract: | A model is presented to demonstrate that a change in the exogenous circumstances of a bank, e.g. an increase in the degree of substitutability of non-bank deposits for its own deposits, can convert a previously advantageous ceiling on its deposit interest rate into a costly constraint on its choice set. The bank's level of profit would be higher if the ceiling were removed. Thus a bank which at one time supported or even requested a deposit interest rate ceiling might subsenquently seek to have the ceiling removed. In this present form, the model is unable to predict which of these two outcomes is more likely. To do so would require explicit modelling of the interaction of the bank and the non-bank with the regulatory authority. |
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