Integration Benefits on EU Retail Credit Markets - Evidence from Interest Rate Pass-Through

28 Pages Posted: 10 May 2002

See all articles by Friedrich Heinemann

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research; University of Heidelberg - Alfred Weber Institute for Economics

Martin Schüler

Centre for European Economic Research (ZEW)

Date Written: April 2002

Abstract

Lending and borrowing interest rates are often slow to adjust to changing capital market conditions. This paper argues that national differences of the pass-through speed in the EU can be regarded as a retail-oriented indicator of financial integration. Based on an ECB database the speed of interest rate adjustments for different markets and countries is measured - showing a considerable fragmentation of markets. Simulations show how much consumers in some countries could gain from a convergence of adjustment speed on the fastest levels.

Keywords: interest rates, pass-through, financial market integration, EU

JEL Classification: G15, F23, E43

Suggested Citation

Heinemann, Friedrich and Schüler, Martin, Integration Benefits on EU Retail Credit Markets - Evidence from Interest Rate Pass-Through (April 2002). ZEW Discussion Paper No. 02-26, Available at SSRN: https://ssrn.com/abstract=309100 or http://dx.doi.org/10.2139/ssrn.309100

Friedrich Heinemann (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Martin Schüler

Centre for European Economic Research (ZEW) ( email )

Postfach 103443
Mannheim, D-68034
Germany
+49/621/1235-148 (Phone)
+49/621/1235-223 (Fax)

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=msh

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