scholarly journals THE VARIANCE AND TREND OF INTEREST RATE – CASE OF COMMERCIAL BANKS IN KOSOVO

2015 ◽  
Vol 3 ◽  
pp. 007-013
Author(s):  
Fidane Spahija
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Commercial Banks ◽  
Service Sector ◽  
Policy Instrument ◽  
Family Economy ◽  
Key Issues ◽  
Independent Variable ◽  
The Interest Rate ◽  
The Impact

Today’s debate on the interest rate is characterized by three key issues: the interest rate as a phenomenon, the interest rate as a product of factors (dependent variable), and the interest rate as a policy instrument (independent variable). In this article, the variance in interest rates, as the dependent variable, comes in two statistical sizes: the variance and trend. The interest rates include the price of loans and deposits. The analysis of interest rates on deposits and loan is conducted for non-financial corporation and family economy. This study looks into a statistical analysis, to highlight the variance and trends of interest rates for the period 2004-2013, for deposits and loans in commercial banks in Kosovo. The interest rate is observed at various levels. Is it high, medium or low? Does it explain growth trends, keep constant, or reduce? The trend is observed whether commercial banks maintain, reduce, or increase the interest rate in response to the policy that follows the Central Bank of Kosovo. The data obtained will help to determine the impact of interest rate in the service sector, investment, consumption, and unemployment.

Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan

2014 ◽  
Vol 4 (1) ◽  
pp. 142 ◽  
Author(s):  
Waseem Ahmad Khan ◽  
Abdul Sattar
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Commercial Banks ◽  
Banking Sector ◽  
Pearson Correlation ◽  
Correlation Method ◽  
Economic Stability ◽  
Independent Variable ◽  
The Interest Rate ◽  
The Impact

The core objective of this project is to analyze the impact of interest rates changes on the profitability of commercial banks being operated in Pakistan by examining the financial statements of four major banks during 2008 to 2012. Like the efficiency of banking sector is considered most important for economic growth, monetary policy implementation and macro-economic stability. From the past few years, interest spread of banking sector of Pakistan is rising. As a result variations in the interest rate depress the savings and investment and on the other hand it increases the efficiency of banks’ lending. In this paper interest rate is an independent variable and bank profitability is a dependent variable. To examine the impact of interest rate changes on the profitability of commercial banks in Pakistan, Pearson correlation method is used in this study. As a result it is found that there is strong and positive correlation between interest rate and commercial banks’ profitability. It means if the value of interest rate is increases/decreases then as result value of banks’ profitability will also increases/decreases.

scholarly journals The Impact of Interest Rate Ceilings on Microfinance Industry

2015 ◽  
Vol 2 (2) ◽  
pp. 10
Author(s):  
Ali Saleh Alshebami ◽  
D. M. Khandare
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Low Income ◽  
Secondary Data ◽  
Research Subject ◽  
Access To Credit ◽  
The Poor ◽  
Good Intention ◽  
The Interest Rate ◽  
The Impact

<p>Imposing ceilings on the interest rate has recently become one of the new hottest topics in microfinance industry; various debates have been discussing this issue to know the effect of interest rate ceilings on the supply of credit in particular and on microfinance industry in general. However in spite of the good intention behind these ceilings, there was no absolute result stating that ceilings have really contributed to the improvement or protection of the poor clients, indeed, these ceilings have hurt those low income people instead of helping them, due to these ceilings most of MFIs left the market or reduced their scale due to the inability to continue operating with low interest rate leaving the very poor clients without access to credit. Thus, the purpose of this paper is to review the impact of imposing such ceilings on the interest rates and to find out what alterative solutions can be employed as substitutes for them. This paper is entirely based on the secondary data collected from various records related to microfinance such as microfinance books, official websites and reports, published papers, and other sources related to the research subject.</p>

scholarly journals The Ability of Selected European Countries to Face the Impending Economic Crisis Caused by COVID-19 in the Context of the Global Economic Crisis of 2008

2020 ◽  
Vol 13 (8) ◽  
pp. 179
Author(s):  
Róbert Oravský ◽  
Peter Tóth ◽  
Anna Bánociová
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Economic Crisis ◽  
Economic Effects ◽  
European Countries ◽  
Consumer Confidence ◽  
Negative Consequences ◽  
Confidence Index ◽  
The Interest Rate ◽  
The Impact

This paper is devoted to the ability of selected European countries to face the potential economic crisis caused by COVID-19. Just as other pandemics in the past (e.g., SARS, Spanish influenza, etc.) have had negative economic effects on countries, the current COVID-19 pandemic is causing the beginning of another economic crisis where countries need to take measures to mitigate the economic effects. In our analysis, we focus on the impact of selected indicators on the GDP of European countries using a linear panel regression to identify significant indicators to set appropriate policies to eliminate potential negative consequences on economic growth due to the current recession. The European countries are divided into four groups according to the measures they took in the fiscal consolidation of the last economic crisis of 2008. In the analysis, we observed how the economic crisis influences GDP, country indebtedness, deficit, tax collection, interest rates, and the consumer confidence index. Our findings include that corporate income tax recorded the biggest decline among other tax collections. The interest rate grew in the group of countries most at risk from the economic crisis, while the interest rate fell in the group of countries that seemed to be safe for investors. The consumer confidence index can be considered interesting, as it fell sharply in the group of countries affected only minimally by the crisis (Switzerland, Finland).

On the Judicial Interest Rate: Towards a Law and Economic Theory

2013 ◽  
Vol 4 (1) ◽  
pp. 34-62
Author(s):  
Hugo A Acciarri ◽  
Nuno Garoupa
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Law And Economics ◽  
Policy Instruments ◽  
Institutional Settings ◽  
Rules Of Procedure ◽  
The Interest Rate ◽  
Substantive Law ◽  
The Impact ◽  
Neutral Effect

AbstractWhile all legal systems implement a form of pre-judgment or post-judgment interest, there is a dearth of literature on substantive law and economics analysing the impact, functioning, and assessment of the judicial interest rate. Current legal scholarship typically views the interest rate as having a neutral effect on private and social costs. This paper demonstrates that the issue is theoretically far more complex and largely influential in legal policy. Due to the asymmetric opportunity costs for each party in a case, judicial interest rates may lead to improper delay of proceedings or the decoupling of damages from recovery. These potential results influence the number of settlements and suits. On this ground, we compare different institutional settings from an economic perspective and conclude that the appropriate mechanism depends on the alternative policy instruments available, namely, the rules of procedure, court fees, or mechanisms for appropriately setting damages. Further, we argue that abolishing the statute which sets pre-judgment interest may be a proposal worth considering.

scholarly journals A Tax-Based Estimate of the Elasticity of Intertemporal Substitution

2013 ◽  
Vol 03 (01) ◽  
pp. 1350001 ◽  
Author(s):  
Jonathan Gruber
Keyword(s):  
Time Series ◽  
Interest Rate ◽  
Interest Rates ◽  
Consumer Expenditure ◽  
Intertemporal Substitution ◽  
Tax Rate ◽  
Elasticity Of Intertemporal Substitution ◽  
Using Data ◽  
The Interest Rate ◽  
The Impact

One of the most important behavioral parameters in macroeconomics is the elasticity of intertemporal substitution (EIS). Starting with the seminal work of Hall (Hall, R., 1978, Stochastic Implications of the Life Cycle — Permanent Income Hypothesis: Theory and Evidence, Journal of Political Economy 86, 971–987), researchers have used an Euler equation framework to estimate the EIS, relating the growth rate of consumption to the after-tax interest rate facing consumers. This large literature has, however, produced very mixed results, perhaps due to an important limitation: The impact of the interest rate on consumption or savings is identified by time-series movements in interest rates. Yet the factors that cause time-series movements in interest rates may themselves be correlated with consumption or savings decisions. I address this problem by using variation across individuals in the capital income tax rate. Conditional on observable characteristics of individuals, tax rate movements cause exogenous shifts in the after-tax interest rate. Using data on total non-durable consumption from the Consumer Expenditure Survey over two decades, I estimate a surprisingly high EIS of two. This finding is robust to a variety of specification checks.

scholarly journals Determinan Suku Bunga dan Likuiditas Bank Terhadap Pertumbuhan Kredit di Indonesia

Jurnal Ecogen ◽  
2020 ◽  
Vol 3 (2) ◽  
pp. 200
Author(s):  
Yeniwati Yeniwati
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Commercial Banks ◽  
Secondary Data ◽  
Least Square ◽  
Bank Credit ◽  
Credit Growth ◽  
Ordinary Least Square ◽  
Banking Community ◽  
The Interest Rate

This study aims to determine the effect of the interest rate (BI rate) on bank credit growth in Indonesia, liquidity on bank credit growth in Indonesia and determine the effect of interest rates and liquidity on bank credit growth in Indonesia. The method used in this study is Ordinary Least Square (OLS) using secondary data from 2009 Quarter I to 2018 Quarter IV. The results of the analysis showed that there was an influence between interest rates on bank credit growth in Indonesia, there was an influence between liquidity on bank credit growth in Indonesia. Together there is an influence between interest rates and bank liquidity on the growth of bank credit in Indonesia. The policy implication of this research is that Bank Indonesia must maintain the benchmark interest rate set in order to trigger an increase in bank credit growth. In addition, Bank Indonesia must monitor the liquidity of commercial banks in Indonesia so that the trust of the banking community is even greaterKeywords : interest rate, Liquidity, Credit

scholarly journals Evaluation of the Impact of the Bank of Russia Key Rate on the Commercial Banks’ Deposit Policy

2020 ◽  
pp. 99-111
Author(s):  
M. N. Konyagina ◽  
I. R. Meurmishvili ◽  
A. A. Dochkina
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Commercial Banks ◽  
Policy Instruments ◽  
Policy Instrument ◽  
Credit System ◽  
Leading Role ◽  
State Of The Economy ◽  
Current Impact ◽  
The Impact

The monetary policy of the Central Bank is in the sphere of interests of economists of various specializations. Determining the value of money in the economy, the money supply, and ensuring the effective functioning of the national payment system, the regulator has a significant impact on the state of the economy and determines the prospects for its development. One of the most important monetary policy instruments is the key rate. However, the efficiency of its application in different economies at different historical periods is different.At the same time, commercial banks, being the core of the credit system, are extremely dependent on the volume and quality characteristics of accumulated deposits. Private clients’ deposits are an important resource for both short-term and long-term operations of credit organizations. In Russia, banks play a leading role in the financial market. In this regard, the evaluation of the impact of a key rate as an important monetary policy instrument on the banks’ deposit policy is of particular relevance in the current state of the Russian economy. Therefore, determining as an aim of the research the evaluation of the current impact of the Bank of Russia key rate on the Russian credit organizations’ deposit policy, the authors sorted out the necessary relevant data on interest rates and deposit volumes in Russian commercial banks in 2014–2018, assessed the strength of the relationship between the Bank of Russia key rate and banks’ deposit rates and the volume of deposits in the country, identified the problems of implementing monetary policy in Russia and evaluated the effectiveness of the key rate as the monetary policy tool.

scholarly journals THE DETERMINANTS OF INTEREST RATE SPREAD AMONG COMMERCIAL BANKS IN KENYA

2017 ◽  
Vol 2 (5) ◽  
pp. 29
Author(s):  
Leah Njoroge ◽  
Mercy Warui ◽  
Catherine Mbogo ◽  
Margaret Chiera ◽  
Dr. Chogii
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Market Structure ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Banking Sector ◽  
Unique Contribution ◽  
High Interest Rate ◽  
Interest Rate Spread ◽  
The Interest Rate

Purpose: To establish the determinants of interest rate spread among commercial banks in Kenya. Methodology: The study utilized a descriptive survey research design. Findings: The results indicated that the commercial banking sector has witnessed a gradual rise in the Interest rate spread. Results also showed that the mean of market structure has been fluctuating with year (2010) being the lowest with mean of 4 and year (2012) being the highest with mean 12. Results also showed that there was no regulation from the year (2005) to the year (2009) but it was later adopted whereas regulations shoot steadily to mean of 1.0 in the year (2009) and remained in the same level the rest of the years. The regression results indicate that there is a positive and significant relationship between market structure, credit risk and interest spread. The regression results also indicated that there is a positive but insignificant relationship between access to information and interest spread. Further, the results indicated that there is a negative and significant relationship between regulation and interest spread. Unique contribution to theory, practice and policy: The study is important to the management of Commercial banks as it will provide an insight on the factors influencing interest rate spread among commercial banks in Kenya. The results of this study will provide information to policy makers and other stakeholders in the financial sector (especially the banks) to come up with strategies that help in dealing with the high interest rate spread experience in the banking sector and thus improve on the financial performance of the organisations. It may be used as a tool for persuading commercial banks to reduce their interest rates spread and hence increase their volume of business, which of course would compensate the loss in the interest rate spread. The study will also be invaluable to the government and CBK. This is because the monetary policy framework of Central Bank of Kenya and its implementation will be guided by a need to ensure, among others: realistic interest rate spreads that encourage financial deepening and a safe, sound, efficient and competitive banking system through discreet risk management. These findings therefore might influence the effectiveness of economic policies. The research results will also be important to scholars and researchers as it will add to the existing pool of knowledge.

scholarly journals The Impact of Interest Rate Marketization on Commercial Banks

2021 ◽  
Vol 9 (4) ◽  
pp. 176
Author(s):  
Yulin He
Keyword(s):  
Interest Rate ◽  
Financial Institutions ◽  
Commercial Banks ◽  
Supply And Demand ◽  
System Reform ◽  
Analysis Process ◽  
Interest Rate Marketization ◽  
Rate Transmission ◽  
The Interest Rate ◽  
The Impact

<p>Interest rate marketization means that the interest rate level of financial institutions operating and financing in the money market is determined by market supply and demand. It includes interest rate determination, interest rate transmission, interest rate structure and marketization of interest rate management. At present, there are still many deficiencies and defects in the traditional interest rate management system. The reform of interest rate marketization is the focus of China’s financial system reform. Therefore, we should not only be brave in innovation, but also carefully study and analyze. In the analysis process, this paper focuses on the impact of interest rate marketization on commercial banks, and puts forward some countermeasures.</p>

scholarly journals Interest Rate Liberalization and Commercial Banks Profitability: Evidence from China

2020 ◽  
Vol 12 (5) ◽  
pp. 90
Author(s):  
Lai Ying
Keyword(s):  
Interest Rate ◽  
Empirical Study ◽  
Interest Rates ◽  
Commercial Banks ◽  
Well Being ◽  
Key Factors ◽  
Interest Rate Liberalization ◽  
Production Growth ◽  
The Future ◽  
The Impact

Enhanced profitability is an important guarantee to improve the well-being of people and better exert the functions of commercial banks in promoting economic, social and production growth on the premise of the existence and development of commercial banks. Interest rate liberalization is one of the key factors which can affect the profitability of commercial banks. An empirical study is thus carried out on 16 Commercial banks (from 2007 to 2018) to analyze the impact of interest rate liberalization on the profitability of commercial banks. We draw main conclusions from this study: (1) the progress of interest rate liberalization has improved the profitability of banks. (2) This kind of impact is inverted U-shaped, that is, with the advancement of interest rate liberalization, the impact will be reversed in the future. (3) For banks of different sizes, the impact is different. Specifically, small and medium-sized banks are more sensitive to the liberalization of interest rates, while for larger banks, the impact is not strong.

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