When Do Costa Rica National Banks Respond to Reserve Requirement Changes?

The International Journal of Business and Finance Research, Vol. 6, No. 3, 2012

13 Pages Posted: 28 Mar 2012 Last revised: 5 Apr 2012

See all articles by Terrance Jalbert

Terrance Jalbert

University of Hawaii - Department of Business Administration

Jonathan D. Stewart

Abilene Christian University

Mercedes Jalbert

The Institute for Business and Finance Research

Multiple version iconThere are 2 versions of this paper

Date Written: March 28, 2012

Abstract

The process of changing reserve requirements in Costa Rica is a three step process. First the central bank makes the decision to change reserve requirements. Several days to several weeks later, the change is announced in the official newspaper. The actual reserve requirement change takes place from several weeks to several months later. Previous studies have limited their analysis to an examination of the decision and the announcement dates. The research shows that Costa Rica national banks do not respond to reserve requirement change announcements or reserve requirement change decisions. In this paper we examine the extent to which Costa Rica national banks respond to reserve requirement changes on the effective day of the reserve requirement change. We find evidence that Costa Rica national banks change their interest rate spreads on the effective day.

Keywords: Banking, Costa Rica, Reserve Requirement Changes, Interest Rates

JEL Classification: E42, E58

Suggested Citation

Jalbert, Terrance and Stewart, Jonathan D. and Jalbert, Mercedes, When Do Costa Rica National Banks Respond to Reserve Requirement Changes? (March 28, 2012). The International Journal of Business and Finance Research, Vol. 6, No. 3, 2012, Available at SSRN: https://ssrn.com/abstract=2030480

Terrance Jalbert (Contact Author)

University of Hawaii - Department of Business Administration ( email )

808-974-7456 (Phone)

Jonathan D. Stewart

Abilene Christian University ( email )

Abilene, TX 79699
United States

Mercedes Jalbert

The Institute for Business and Finance Research ( email )

P.O. Box 5569
Hilo, HI 96720
United States

HOME PAGE: http://www.theIBFR.com

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