Abstract
PurposeThis study aims to examine a potential case of interdependence in loan and deposit interest rate setting.Design/methodology/approachThe authors set up a theoretical microsimulation model with endogenous loan interest rate determination via a learning algorithm.FindingsThe authors show that in certain environments, it may be beneficial for large banks to incorporate information on retail funding costs into the lending rate setting decision.Originality/valueThe author’s model is based on the realistic money creation mechanism.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
