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Jurnal Ekonomi Malaysia

27 1993 29 – 55

Monetary Policy and Commercial Banks: An Overview

Fakulti Ekonomi'
Universiti Kebangsaan Malaysia
43600 UKM Bangi
Selangor Darul Ehsan


Fakulti Ekonomi'
Universiti Kebangsaan Malaysia
43600 UKM Bangi
Selangor Darul Ehsan


Abstract

The relationship between monetary policy and economic activity is one of the basic questions of macroeconomics. Economists have addressed this question in a number of ways. The traditional approach focuses on the importance of the liability side of the bank balance sheet. However, the traditional approach becomes less relevant as the number of substitutes for conventionally defined money increases in consumer’s portfolio. Recently, discussion on this relationship has gone further to include both credit rationing and bank structure. Interest has also grown in exploring the possible links between Islamic banks and monetary policy, and the deregulation process in the banking system. As a result, the role of money supply as an operating target of monetry policy has been undermined. The deregulation of commercial banks has changed the transmission mechanism for monetry policy from money supply to interest rates and bank credit.

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ismail, , & smith, (1993). Monetary Policy and Commercial Banks: An Overview. Jurnal Ekonomi Malaysia, 27, 29–55.

@article{ismail1993monetary,
  title={Monetary Policy and Commercial Banks: An Overview},
  author={ismail, abdul and smith, peter},
  journal={Jurnal Ekonomi Malaysia},
  volume={27},
  number={},
  pages={29—55},
 

year={1993},
}

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