TY  - CHAP
AB  - Abstract A full Edgeworth cycle of deposit rate is divided into two phases: an “overcutting cycle” in which the banks battle for deposits, and a “relenting cycle” in which the banks cease battling and instead choose to restore a temporarily low deposit rate. Such strategies have two testable implications on overall market movements. First, deposit rate decreases are more likely to be initiated when the deposit rate is near the upper bound of a cycle. Second, deposit rate decreases are more sensitive than increases to market interest rate changes. This chapter empirically confirms this pattern and shows strong evidence for the presence of Edgeworth cycles in deposit rates after Hong Kong’s interest rate deregulation.
VL  - 25
SN  - 978-1-78756-453-4, 978-1-78756-454-1/1571-0386
DO  - 10.1108/S1571-038620180000025006
UR  - https://doi.org/10.1108/S1571-038620180000025006
AU  - Fung Michael K.
PY  - 2018
Y1  - 2018/01/01
TI  - Deposit Rate Asymmetry and Edgeworth Cycles after Hong Kong’s Interest Rate Deregulation
T2  - Banking and Finance Issues in Emerging Markets
T3  - International Symposia in Economic Theory and Econometrics
PB  - Emerald Publishing Limited
SP  - 105
EP  - 121
Y2  - 2024/04/19
ER  -