TITLE:
Households Credits, Financial Intermediation and Monetary Policies
AUTHORS:
Cécile Bastidon
KEYWORDS:
Financial Intermediation, Households Credits, Non-Standard Monetary Policies
JOURNAL NAME:
Modern Economy,
Vol.5 No.10,
September
18,
2014
ABSTRACT: This paper develops a theoretical model of financial intermediation with
three original characteristics. Firstly, all sectors are taken into account
within total outstanding credits, including households. Secondly, in periods of
high financial strains, the relationship between prices and funding supply
volumes may be non-monotonic. Finally, the occurrence of interbank credit
rationing results in other sectors’ funding rationing in credit and securities
markets. The central bank conducts a non-standard type monetary policy. We show
that the characteristics of financial intermediation then determine the
magnitude of transmission of a shock on households financing costs and the
content of the resulting monetary policy.