How deviations from FOMC’s monetary policy decisions from a benchmark monetary policy rule affect bank profitability: evidence from U.S. banks
Abstract
This paper aims to provide fresh empirical evidence on how Federal Open Market Committee (FOMC) monetary policy decisions from a benchmark monetary policy rule affect the profitability of US banking institutions. It thereby provides a link between the literature on central bank monetary policy implementation through monetary rules and banks’ profitability. It uses a novel data set from 11,894 US banks, spanning the period 1990 to 2013. The empirical findings show that deviations of FOMC monetary policy decisions from a number of benchmark linear and non-linear monetary (Taylor type) rules exert a negative and statistically significant impact on banks’ profitability.Citation
Apergis, N., and Lau, C.K.M. (2017) ‘How deviations from FOMC’s monetary policy decisions from a benchmark monetary policy rule affect bank profitability: evidence from U.S. banks’, Journal of Financial Economic Policy, 9(4), pp.354-371. Doi: 10.1108/JFEP-02-2017-0008Publisher
EmeraldJournal
Journal of Financial Economic PolicyDOI
10.1108/JFEP-02-2017-0008Type
ArticleLanguage
enISSN
1757-6385ae974a485f413a2113503eed53cd6c53
10.1108/JFEP-02-2017-0008
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