Abstract
This study investigates the state, development and drivers of banking market integration in the member countries of the Southern African Development Community (SADC). A Principal Component Analysis (PCA) of national retail interest rates indicates increasing integration in loan and deposit markets. These integration processes are not developing uniformly and we can identify a convergence club. When investigating the interest rate pass-through from central bank onto retail rates for this convergence club, we find both, genuine and monetary-integration driven processes though the latter dominate. We thus conclude that a selective expansion of the Common Monetary Area (CMA) is possible.
Original language | English |
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Pages (from-to) | 3857-3876 |
Number of pages | 20 |
Journal | Applied Economics |
Volume | 44 |
Issue number | 29 |
DOIs | |
Publication status | Published - 1 Jan 2012 |
Keywords
- banking market integration
- monetary integration
- Southern African Development Community
- interest rate pass-through
- principle components
- AFRICAN DEVELOPMENT COMMUNITY
- COMMON MONETARY AREA
- RATE PASS-THROUGH
- FINANCIAL INTEGRATION
- CURRENCY UNIONS
- SACU COUNTRIES
- SOUTH-AFRICA
- UNIT-ROOT
- CONVERGENCE
- COINTEGRATION