Standard & Poor's official response to the Basel Committee's proposal

Article Abstract:

Financial institute Standard & Poor fully endorse proposals by the Basel Committee which would help regulate credit risk when lending money to low-income countries.

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A note on the spread between the rates of fixed and variable rate loans

Article Abstract:

A model is derived for the optimal expected spread between the rates of fixed and variable rate loans of a risk-averse bank. Findings indicate that the spread directly varies with funding cost volatility, the bank's aversion to risks and the profit margin on variable rate loans. The optimal mix of fixed and variable rate lending is also analyzed in the loan portfolio of a bank.

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The discount window and credit availability

Article Abstract:

A model was presented which illustrate the effect of the discount window on the decisions of banks confronting regulatory capital requirements and stochastic deposit supply. It was shown that banks have the tendency to select a larger lending capacity whenever the discount window is available. Banks also have the tendency to avoid the window whenever the cost of capital is higher during recessions. Such possibility may result to a market downturn.

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