RBNZ paper investigates weaker pass-through since 2008
Banks have relied more on more stable, longer-term funding sources since 2008
A movement towards more stable funding sources since the 2008 crisis appears to have weakened the link between the policy rate and mortgage rates in New Zealand, according to research published by the Reserve Bank of New Zealand.
The study, by Bevan Cook and Daan Steenkamp, observes how the link between the policy rate and retail mortgage rates was “relatively stable” in the run up to 2008. After this point, the spread between the two rates widened and pass-through of changes in policy weakened
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