Author: Martin Karlsson & Sebastian Dahlén, students at Karlstad Business School. Keywords: Bank, repo rate, changes, variable mortgage rate, margins, relationship, competition. Problem formulation: How do banks differ in behavior for increases and decreases of the repo rate. Purpose: The paper aims to examine how banks differ in their response to a decrease and increase in the repo rate. Two periods between 2002-2006 and 2010-2014 were studied to compare the competition on the bank market historically. Background: This segment gives a basic understanding on the bank market, interest rates and loans. Method: The study is a quantitative study of data for the floating mortgage rate over two time periods using regressions models. Articles, literature and reports form the basis of the theory segment. Theory: The paper gives a theoretical understanding on how pricing works on the banking market focusing on oligopoly theory. Empirical data: The data sample is based on secondary data retrieved from the banks’ official web sites. Analysis: The results are analyzed in a separate segment to give a better overview. iv Conclusion: The results show a correlation between the banks mortgage rate and the repo rate. The banks responses to decrease and increases of the repo rate differed for the years 2002-2006 and 2010-2014. For the first period banks were keener on decreasing their mortgage rates than increasing. The opposite relationship was found in the second period.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:kau-37804 |
| Date | January 2015 |
| Creators | Karlsson, Martin, Dahlén, Sebastian |
| Publisher | Karlstads universitet, Handelshögskolan, Karlstads universitet, Handelshögskolan |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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