Summary of the General Discussion on “Interest Liberalization and the Estimation of Implicit Interest Rates in China's Banking Sector”

Abstract

November 01 2017 Summary of the General Discussion on “Interest Liberalization and the Estimation of Implicit Interest Rates in China's Banking Sector” Author and Article Information Online Issn: 1536-0083 Print Issn: 1535-3516 © 2017 by the Asian Economic Panel and the Massachusetts Institute of Technology2017Massachusetts Institute of Technology Asian Economic Papers (2017) 16 (3): 311–312. https://doi.org/10.1162/asep_a_00579 Cite Icon Cite Permissions Share Icon Share Facebook Twitter LinkedIn MailTo Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Summary of the General Discussion on “Interest Liberalization and the Estimation of Implicit Interest Rates in China's Banking Sector”. Asian Economic Papers 2017; 16 (3): 311–312. doi: https://doi.org/10.1162/asep_a_00579 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsAsian Economic Papers Search Advanced Search Wing Thye Woo led the discussion with a number of comments on Shen's representation of China's banking sector. First, in describing the activities of China's banking sector, Woo advised the authors to consider using the term implicit deposit rate premium rather than implicit interest, because this change in terminology more directly conveys the measurement of payment above and beyond the explicit interest rate. Next, Woo cautioned that the bank maximization problem is more complex than it is in the paper. In particular, the model treats the revenue per loan, ra, as exogenous. Although the exogeneity assumption may be an accurate representation of China's banking sector in 2005, however, Woo argued that assumption of exogeneity was no longer appropriate by 2013. Instead, Woo suggested that the modeling of bank decisions in 2013 should allow for the endogenous selection of both ra and the implicit interest rate, im... You do not currently have access to this content.