The authors argue that loan rates lag behind prime rate during economic recovery and never reach the low limits that might otherwise occur due to changes in the regulatory and market environment. The changes referred to specifically include competition between market components, changes in bankruptcy law, and the introduction of new financial instruments such as money market deposit accounts.
loan rates, interest rates, competition, money market deposit accounts (MMDA), bankruptcy
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Scott, Jonathan A. and Hempel, George H., "Bank Performance in the Emerging Recovery: A Changing Risk-Return Environment" (1983). Working Papers. 53.