If this rate compounds, the corresponding annual lending rate is 127 to 134 per cent, the average of which approximates with that found in this research.
Furthermore, deposit and lending rate regulations prevented banks from raising the price of credit to a level that would alone compensate for the risk of monitoring breakdown.
This is motivated by the observation that, typically, consumers pay a substantial spread over the lending rate to borrow, whereas purchasing bonds involves relatively small transaction costs.
Therefore, we take a dim view of the fact that since the introduction of the euro, the prime lending rate has doubled.
We have seen the minimum lending rate come down on about seven occasions in the last few months.
The minimum lending rate is going up, and this will be followed by further increases.
There have been big jumps in the minimum lending rate in the past in the autumn.
What effect will the cut in minimum lending rate have?
