IDEAS home Printed from https://ideas.repec.org/a/ibf/ijbfre/v6y2012i3p89-101.html
   My bibliography  Save this article

When Do Costa Rica National Banks Respond To Reserve Requirement Changes?

Author

Listed:
  • Terrance Jalbert
  • Jonathan Stewart
  • Mercedes Jalbert

Abstract

The process of changing reserve requirements in Costa Rica is a three step process. First the central bank makes the decision to change reserve requirements. Several days to several weeks later, the change is announced in the official newspaper. The actual reserve requirement change takes place from several weeks to several months later. Previous studies have limited their analysis to an examination of the decision and the announcement dates. The research shows that Costa Rica national banks do not respond to reserve requirement change announcements or reserve requirement change decisions. In this paper we examine the extent to which Costa Rica national banks respond to reserve requirement changes on the effective day of the reserve requirement change. We find evidence that Costa Rica national banks change their interest rate spreads on the effective day.

Suggested Citation

  • Terrance Jalbert & Jonathan Stewart & Mercedes Jalbert, 2012. "When Do Costa Rica National Banks Respond To Reserve Requirement Changes?," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 6(3), pages 89-101.
    • Handle: RePEc:ibf:ijbfre:v:6:y:2012:i:3:p:89-101
    as

    Download full text from publisher

    File URL: http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v6n3-2012/IJBFR-V6N3-2012-7.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fabozzi, Frank J. & Thurston, Thom B., 1986. "State Taxes and Reserve Requirements as Major Determinants of Yield Spreads among Money Market Instruments," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 21(4), pages 427-436, December.
    2. James, Christopher, 1987. "Some evidence on the uniqueness of bank loans," Journal of Financial Economics, Elsevier, vol. 19(2), pages 217-235, December.
    3. Jonathan D. Stewart & Scott E. Hein, 2002. "An Investigation of the Effect of the 1990 Reserve Requirement Change on Financial Asset Prices," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 25(3), pages 367-382, September.
    4. Osborne, Dale K. & Zaher, Tarek S., 1992. "Reserve requirements, bank share prices, and the uniqueeness of bank loans," Journal of Banking & Finance, Elsevier, vol. 16(4), pages 799-812, August.
    5. Reinhart, Carmen M & Reinhart, Vincent R, 1999. "On the Use of Reserve Requirements in Dealing with Capital Flow Problems," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 4(1), pages 27-54, January.
    6. Black, Fischer, 1975. "Bank funds management in an efficient market," Journal of Financial Economics, Elsevier, vol. 2(4), pages 323-339, December.
    7. Gordon H. Sellon & Stuart E. Weiner, 1997. "Monetary policy without reserve requirements : case studies and options for the United States," Economic Review, Federal Reserve Bank of Kansas City, vol. 82(Q II), pages 5-30.
    8. Cosimano, Thomas F. & McDonald, Bill, 1998. "What's different among banks?," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 57-70, February.
    9. Fama, Eugene F., 1985. "What's different about banks?," Journal of Monetary Economics, Elsevier, vol. 15(1), pages 29-39, January.
    10. Scott E. Hein & Jonathan D. Stewart, 2002. "Reserve requirements: A modern perspective," Economic Review, Federal Reserve Bank of Atlanta, vol. 87(Q4), pages 41-52.
    11. Slovin, Myron B. & Sushka, Marie E. & Bendeck, Yvette M., 1990. "The market valuation effects of reserve regulation," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 3-19, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabia Aparecida de Carvalho & Cyntia F. Azevedo, 2008. "The incidence of reserve requirements in Brazil: Do bank stockholders share the burden?," Journal of Applied Economics, Universidad del CEMA, vol. 11, pages 61-90, May.
    2. Xiaohui Zhang & Zhihong Ji & Yong Cui, 2009. "Reserve requirement, reserve requirement tax and money control in China: 1984–2007," Frontiers of Economics in China, Springer;Higher Education Press, vol. 4(3), pages 361-383, September.
    3. Mahir Binici & Bülent Köksal, 2013. "Do Bank Stockholders Share the Burden of Required Reserve Tax? Evidence from Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(4), pages 46-73, July.
    4. Rocío Betancourt & Hernando Vargas, 2009. "Encajes bancarios y tasas de interés," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 27(59), pages 158-186, June.
    5. Fernando Alvarez, 1993. "Reserve Requirements: Not a Solution to the Potential Capital Inflow Problem in Cuba," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 3.
    6. Cosimano, Thomas F. & McDonald, Bill, 1998. "What's different among banks?," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 57-70, February.
    7. Gerber, Anke, 2008. "Direct versus intermediated finance: An old question and a new answer," European Economic Review, Elsevier, vol. 52(1), pages 28-54, January.
    8. Hyytinen, Ari & Toivanen, Otto, 2004. "Monitoring and market power in credit markets," International Journal of Industrial Organization, Elsevier, vol. 22(2), pages 269-288, February.
    9. Gorton, Gary & Winton, Andrew, 2003. "Financial intermediation," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 8, pages 431-552, Elsevier.
    10. Ramon Caminal, 2002. "Taxation of banks: A theoretical framework," UFAE and IAE Working Papers 525.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    11. Elizabeth Laderman, 1993. "Determinants of bank versus nonbank competitiveness in short-term business lending," Economic Review, Federal Reserve Bank of San Francisco, pages 17-32.
    12. Tarek S. Zaher & Dale K. Osborne, 2008. "On the Incidence of Deposit Taxes," NFI Working Papers 2008-WP-03, Indiana State University, Scott College of Business, Networks Financial Institute.
    13. Bengtsson, Ola, 2013. "Relational venture capital financing of serial founders," Journal of Financial Intermediation, Elsevier, vol. 22(3), pages 308-334.
    14. Ongena, S. & Smith, D.C., 2000. "Bank relationships : A review," Other publications TiSEM 993b88a5-9a0f-42de-9cec-6, Tilburg University, School of Economics and Management.
    15. DeYoung, Robert E. & Hughes, Joseph P. & Moon, Choon-Geol, 2001. "Efficient risk-taking and regulatory covenant enforcement in a deregulated banking industry," Journal of Economics and Business, Elsevier, vol. 53(2-3), pages 255-282.
    16. Bo Becker & Jens Josephson, 2016. "Insolvency Resolution and the Missing High-Yield Bond Markets," The Review of Financial Studies, Society for Financial Studies, vol. 29(10), pages 2814-2849.
    17. Tlili, Rim, 2012. "Comment justifier la multibancarité au sein des PME ?," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/10919 edited by Etner, François.
    18. Djedidi-Kooli, Salima, 2009. "L’accès au financement des PME en France : quel rôle joué par la structure du système bancaire ?," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/8354 edited by Etner, François.
    19. Shin, G. Hwan & Kolari, James W., 2004. "Do some lenders have information advantages? Evidence from Japanese credit market data," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2331-2351, October.
    20. Akhigbe, Aigbe & McNulty, James E., 2011. "Bank monitoring, profit efficiency and the commercial lending business model," Journal of Economics and Business, Elsevier, vol. 63(6), pages 531-551.

    More about this item

    Keywords

    Reserve Requirements; Banking; Costa Rica; Interest Rates;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibf:ijbfre:v:6:y:2012:i:3:p:89-101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mercedes Jalbert (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.