Interest Rate Cap, Relationship Lending and Bank Competition in Bangladesh

Friday, 21 October, 2016
Abstract: 
Interest rate caps on loans are unarguably important policy tools in both developed and developing countries. In this project I attempt to empirically test whether this policy tool is effective in Bangladesh. I find significant and persistent increase in credit supply, indicating that the policy helped solving market power of banks and helping to build new borrower-lender relationships.