Work detail

Financial Stability Transparency and Interest Rates

Author: Bc. Petr Pařízek
Year: 2014 - summer
Leaders: prof. Roman Horváth Ph.D.
Consultants:
Work type: Bachelors
Language: English
Pages: 54
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/137410/
Abstract: This paper examines the relationship between nancial stability transparency
and nominal interest rates on a panel data with more than 50 countries in
years 2000 to 2010, controlling for macroeconomic conditions. We investi-
gate the same relationship using monetary policy transparency, we compare
the results and based on the existing literature we check for non-linear ef-
fects of transparency. Moreover, we examine how this relationship changes
in nancially good and bad times in terms of nancial stress. We nd nega-
tive relationship between both nancial stability and monetary policy trans-
parency and short-term interest rates. Especially in the case of monetary
policy transparency our results suggest non-linear relationship and the exis-
tence of an intermediate optimal level of transparency. For nancially good
and bad times our ndings are miscellaneous, some in accordance and some
in contradiction with the literature. Generally, our results suggest that the
e ect of nancial stability transparency on short-term interest rates is weaker
than the e ect of monetary policy transparency. For the long-term interest
rates, we nd no evidence of the e ect of nancial stability nor monetary
policy transparency. Examining the data in nancially good and bad times,
our results remain insigni cant
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