Abstract
This paper derives some insights into the monetary policy specialness of banking firms, relative to commercial firms, from an analysis of the sensitivity of their stock returns to monetary policy changes. The results indicate that banks are "special" in the sense that the activity/balance-sheet regulation forces them to bear unnecessary interest rate risk. The evidence supports the view that eliminating the separation of banking from commerce would produce a banking system that is less sensitive to interest rate risk.
Original language | English (US) |
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Pages (from-to) | 171-182 |
Number of pages | 12 |
Journal | Journal of Economics and Business |
Volume | 42 |
Issue number | 2 |
DOIs | |
State | Published - May 1990 |
Externally published | Yes |
ASJC Scopus subject areas
- General Business, Management and Accounting
- Economics and Econometrics