Abstract
This paper examines the pass-through from the market interest to the rate charged on bank loans using aggregate data for the U.K. Thereby, we explicitly disentangle credit supply and demand and allow the interest rate charged on loans to depend on the volume of loans. We find that, although banks adjust the lending rate to some extent, they largely accommodate shifts in demand. Overall, our results are consistent with the idea that banks provide insurance
against liquidity shocks.
| Original language | English |
|---|---|
| Number of pages | 19 |
| Publication status | Published - Mar 2009 |
Fields of science
- 405002 Agricultural economics
- 502 Economics
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- 504014 Gender studies
- 506004 European integration
- 507016 Regional economy
- 303010 Health economics
JKU Focus areas
- Social Systems, Markets and Welfare States
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