Article ID Journal Published Year Pages File Type
5055377 Economic Modelling 2011 5 Pages PDF
Abstract
►The bank interest margin is the spread between the loan rate and the deposit rate. ►Regret-averse preferences are explicitly characterized. ►Regret aversion is shown to have real effect on the optimal bank interest margin. ►Regret aversion is shown to adversely affect the stability of the banking system.
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Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
Preview
Regret theory and the banking firm: The optimal bank interest margin
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