Interest Rate Deregulation: Monetary Policy Efficacy and Rate Rigidity
This paper examines the effects of interest rate regulation, and subsequent deregulation, on the efficacy of monetary policy and rigidity of retail bank deposit rates in Hong Kong. Using an error correction model, we find that interest rate deregulation increases the efficacy of monetary policy by improving the correlation between retail bank deposit rates and market interest rates and increasing the degree of long-term pass-through for retail bank deposit rates. Our study also shows that adjustments in retail bank deposit rates are asymmetric and rigid upward during the regulated period, but tend to be rigid downward during the deregulated period. The spreads between retail bank deposit rates and market rates have also tightened sharply following the deregulation of interest rates.
Interest rate regulation Monetary policy Interest rate pass-through Asymmetric rigidity Monopsonistic rents Bank deposits
Beng Soon Chong Ming-Hua Liu
Nanyang Business School,Nanyang Technological University,Singapore Faculty of Business,Auckland University of Technology,New Zealand
国际会议
大连
英文
1-28
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）