European Parliament Library

Interest Rate Liberalization in China, Tarhan Feyzioglu, Nathan Porter, Elöd Takáts

Abstract
What might interest rate liberalization do to intermediation and the cost of capital in China? China's most binding interest rate control is a ceiling on the deposit rate, although lending rates are also regulated. Through case studies and model-based simulations, we find that liberalization will likely result in higher interest rates, discourage marginal investment, improve the effectiveness of intermediation and monetary transmission, and enhance the financial access of underserved sectors. This can occur without any major disruption. International experience suggests, however, that achieving these benefits without unnecessary instability, requires vigilant supervision, governance, and monetary policy, and a flexible policy toolkit
Table Of Contents
Contents; I. Introduction; II. A Model of China's Banking Sector; A. Baseline Oligopoly Model; B. Calibration; III. How May Interest Rate Liberalization Change Chinese Banking?; A. The Impact of Liberalization; B. Robustness; IV. What Has Been the Experience with Liberalization Elsewhere?; Box: Key Dates in Interest Rate liberalization in China; A. Nordic Countries; B. Savings and Loan in the U.S.; C. Turkey; D. Korea; E. Lessons; V. Conclusion; Technical Appendix; References
Language
eng
Literary Form
non fiction
Note
"August 2009."
Physical Description
1 online resource (30 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781282843844

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