Convergence in Eurozone Retail Banking? What Interest Rate Pass-Through Tells Us About Monetary Policy Transmission, Competition and Integration

Sander, Harald; Kleimeier, Stefanie

doi:10.2139/ssrn.424890

Cited by 40 publications

(47 citation statements)

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“…Convergence in efficiency is expected to accelerate in future with a greater number of cross-border mergers and acquisitions. Similarly, Sander and Kleimeier (2004) found that heterogeneity across the Eurozone has decreased in some banking markets. However, as legal and cultural differences at the national level remain important, convergence remains incomplete and monetary policy will continue to operate in a heterogeneous Eurozone.…”

Section: Introductionmentioning

confidence: 91%

“…In addition, banking integration has also been investigated by studying the convergence of returns on assets and profitability Kashyap 2009, Ilut andChirlesan 2012), convergence of cost efficiencies (Weill 2009, Casu andGirardone 2010), and interest rate pass-through (e.g., Sander and Kleimeier 2004). While the convergence of returns on assets of banks across the EMU is not observed despite the juridical and political efforts undertaken in Europe, the evidence of convergence in cost efficiency of banks across European countries is attributed to lagging behind rather than catching up with best practices.…”

Section: Introductionmentioning

confidence: 99%

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Integration from Retail Banking to Non-Financial Corporations in EMU

Sehgal

Gupta

Deisting

2016

Journal of Economic Integration

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This paper investigates the integration process within the European Economic and Monetary Union's retail banking industry by analyzing deposit and lending rates to nonfinancial corporations. The investigation covers the 2003~2014 period, examining the normal period, the global crisis period, and the European debt crisis period. The paper classifies sampled countries into three groups on the basis of their Gross Domestic Product to investigate the relationship between economic size and degree of integration. We employ five different indicators to assess various dimensions of integration: beta convergence, sigma convergence, variance ratio, asymmetric dynamic conditional correlation, and dynamic co-integration. The results point toward a weak degree of integration, which was worsened by the twin crises. In addition, results indicate that more heterogeneity exists in the credit market than in the deposits market. Furthermore,

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Section: Introductionmentioning

confidence: 91%

Section: Introductionmentioning

confidence: 99%

Integration from Retail Banking to Non-Financial Corporations in EMU

Sehgal

Gupta

Deisting

2016

Journal of Economic Integration

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“…Short-term products are more responsive than long-term products. Factors relating to market structure and competition, and the lack of integration in retail banking, have been suggested as explanations for this slow responsiveness (Mojon, 2000;Sander and Kleimeier, 2004;de Bondt, 2005;de Bondt et al, 2005;Kleimeier and Sander, 2006). The full implications for consumer welfare of the widespread finding of sluggish pass-through in retail financial services have, as far as we are aware, yet to be quantified.…”

Section: The Monetary Transmission Mechanism and Interest Rate Pass-tmentioning

confidence: 99%

European banking: An overview

Goddard

Molyneux

Wilson

et al. 2007

Journal of Banking & Finance

247

144

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“…Obviously, a weak pass-through from the policy rate to market rates will weaken the influence of monetary policy on the real economy through these three channels. Empirical research suggests that the interest-rate pass-through is sluggish and exhibits strong asymmetries in advanced economies (deBondt, 2005 andKleimeier, 2004a).…”

Section: Introductionmentioning

confidence: 99%

Interest rate pass-through and monetary policy asymmetry: A journey into the Caucasian black box

Jamilov

Égert

2014

Journal of Asian Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper analyses the interest rate pass-through for five economies of the CaucasusArmenia, Azerbaijan, Georgia, Kazakhstan, and Russia. Employing an autoregressive distributed lag (ARDL) specification to monthly data, we find that the interest rate passthrough is systematically incomplete and sluggish, probably due to macroeconomic instability and low banking sector competition. It is not clear whether pass-through has improved over time and asymmetric adjustment is found to characterize the pass-through only occasionally. Overall, our results show a considerable degree of cross-country heterogeneity in the size and speed of the pass-through. JEL-Code: E430, E520, N250. Terms of use: Documents in EconStor may

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Convergence in Eurozone Retail Banking? What Interest Rate Pass-Through Tells Us About Monetary Policy Transmission, Competition and Integration

Cited by 40 publications

References 1 publication

Integration from Retail Banking to Non-Financial Corporations in EMU

Integration from Retail Banking to Non-Financial Corporations in EMU

European banking: An overview

Interest rate pass-through and monetary policy asymmetry: A journey into the Caucasian black box

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