Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227474
Authors: 
Heckmann, Lotta
Moertel, Julia
Year of Publication: 
2020
Series/Report no.: 
Bundesbank Discussion Paper No. 59/2020
Abstract: 
This paper shows that the supply side of credit is a major factor for the phenomenonof hampered interest rate pass-through in monopolistic banking markets. Our data,covering all 1,555 small and medium sized banks in Germany, provides a clear wayto partial out demand shocks; we are thus able to show that while market-powerbanks charge higher loan rates, they spare their borrowers a part of exogenousupward shifts in the yield curve and furthermore withhold a substantial part ofrising market rates from their depositors. Because high market-power banks inour sample are relatively more profitable, they seem to be able to insure theirrelationship-customers against adverse shocks.
Subjects: 
interest rate pass-through
bank competition
credit supply
JEL: 
E43
E51
E52
G21
ISBN: 
978-3-95729-791-4
Document Type: 
Working Paper

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