Khemraj, Tarron (2009): A note on US excess bank reserves and the credit contraction.
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This paper reports aggregate bank excess liquidity preference curves for the pre-crisis and crisis periods. It is argued that the flat curve reflects a threshold lending rate at which point banks accumulate reserves passively. Moreover, the expansion of reserves – when the lending rate threshold is binding – does not lead to credit expansion. The latter would require policies that directly increase the demand for loans, particularly by the business sector.
|Item Type:||MPRA Paper|
|Original Title:||A note on US excess bank reserves and the credit contraction|
|English Title:||A note on US excess bank reserves and the credit contraction|
|Keywords:||bank reserves, minimum loan interest rate, credit crunch|
|Subjects:||E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General
E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E41 - Demand for Money
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
|Depositing User:||Tarron Khemraj|
|Date Deposited:||19 Nov 2009 15:51|
|Last Modified:||30 Nov 2016 21:40|
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