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Assessing the impact of deposit benchmark interest rate on banking loan dynamics

Ansori Moch.F., Al Jasir H., Sihombing A.H., Putra S.M., Nurfaizah D.A., Nurulita E.
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Deposit benchmark interest rates are a policy implemented by banking regulators to calculate the interest rates offered to depositors, maintaining equitable and competitive rates within the financial industry. It functions as a benchmark for determining the pricing of different banking products, expenses, and financial choices. The benchmark rate will have a direct impact on the amount of money deposited, which in turn will determine the amount of money available for lending.We are motivated to analyze the influence of deposit benchmark interest rates on the dynamics of banking loans. This study examines the issue using a difference equation of banking loans. In this process, the decision on the loan amount in the next period is influenced by both the present loan volume and the information on its marginal profit. An analysis is made of the loan equilibrium point and its stability. We also analyze the bifurcations that arise in the model. To ensure a stable banking loan, it is necessary to set the benchmark rate higher than the flip value and lower than the transcritical bifurcation values. The confirmation of this result is supported by the bifurcation diagram and its associated Lyapunov exponent. Insufficient deposit benchmark interest rates might lead to chaotic dynamics in banking lending. Additionally, a bifurcation diagram with two parameters is also shown. We do numerical sensitivity analysis by examining contour plots of the stability requirements, which vary with the deposit benchmark interest rate and other parameters. In addition, we examine a nonstandard difference approach for the previous model, assess its stability, and make a comparison with the standard model. The outcome of our study can provide valuable insights to the banking regulator in making informed decisions regarding deposit benchmark interest rates, taking into account several other banking factors.

Ключевые слова: chaos, deposit benchmark rate, sensitivity analysis, two-parameter bifurcation
Цитата: Ansori Moch.F., Al Jasir H., Sihombing A.H., Putra S.M., Nurfaizah D.A., Nurulita E. Assessing the impact of deposit benchmark interest rate on banking loan dynamics // Компьютерные исследования и моделирование, 2024, т. 16, № 4, с. 1023-1032
Citation in English: Ansori Moch.F., Al Jasir H., Sihombing A.H., Putra S.M., Nurfaizah D.A., Nurulita E. Assessing the impact of deposit benchmark interest rate on banking loan dynamics // Computer Research and Modeling, 2024, vol. 16, no. 4, pp. 1023-1032
DOI: 10.20537/2076-7633-2024-16-4-1023-1032
URL: http://crm.ics.org.ru/journal/article/3506/
Creative Commons License Статья доступна по лицензии Creative Commons Attribution-NoDerivs 3.0 Unported License.

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