In a model with bankruptcy costs and segmented deposit and equity markets, we endogenize the cost of equity and deposit finance for banks. Despite risk neutrality, equity capital earns a higher expected return than direct investment in risky assets. Banks hold positive capital to reduce...

Kosovo's sluggish economic growth and financial market developments are two main reasons for conducting the analysis of banking system interest rates in Kosovo. It has been always considered that increase in the number of banks will in turn result in higher competitiveness; however this did not...

Growth of non-cash monies has been sustained in the main by that of individual ruble-denominated bank deposits. The deposits and monies kept on their bank accounts by organizations have been growing at a slower pace, thus corresponding to the movement of their turnover in nominal terms. At the...

We study how monetary policy affects the funding composition of the banking sector. When monetary tightening reduces the supply of retail deposits, banks attempt to substitute wholesale funding for deposit outflows to smooth their lending. Due to financial frictions, banks have varying degrees...