IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-37239-9_7.html
   My bibliography  Save this book chapter

Credit and Deposit Pricing

In: Bank Management and Supervision in Developing Financial Markets

Author

Listed:
  • Wilbert O. Bascom

    (First Equity Corporation)

Abstract

The deregulation of financial markets in developing countries has changed the operational environment of banks in substantial ways. The high and volatile interest rates that accompanied deregulation have caused firms with excess balances to demand effective cash management services, and required banks to price their loans to reflect the risk inherent in these loans, the shareholders’ demand for a competitive return on equity, and the increased cost of funding. In repressed financial markets the loan pricing system was a simple one that recognized the stable nominal interest rates on deposits and fixed spreads. Although the pricing standards in repressed financial markets (for example, contractual interest rates, fees and compensating balances) continue to be relevant in developing financial markets, these standards are modified and new standards added. The principal objectives of the new pricing standards are to enable banks in developing financial markets to cope with the: (1) increased competition between themselves and non-bank providers of credit, deposit, and other financial products and services; (2) reduced level of customer loyalty; (3) expanded supply of competitively priced saving and borrowing instruments; and (4) urgent need to price the risks inherent in the banks’ lending activities.

Suggested Citation

  • Wilbert O. Bascom, 1997. "Credit and Deposit Pricing," Palgrave Macmillan Books, in: Bank Management and Supervision in Developing Financial Markets, chapter 7, pages 122-146, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-0-230-37239-9_7
    DOI: 10.1057/9780230372399_7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    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:pal:palchp:978-0-230-37239-9_7. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    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.