Publication details
The hysteresis erosion of the discount rate control potential in CR conditions – behavioral solution
| Authors | |
|---|---|
| Year of publication | 2014 |
| Type | Article in Proceedings |
| Conference | Managing and Modelling of Financial Risks (Řízení a modelování finančních rizik) |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | Modeling-discount rate-hysteresis erosion-regulating potential-behavioral finance. |
| Attached files | |
| Description | The paper of interdisciplinary nature is focused to the modeling of interest rate risk at the strategic level of the banking system of the Czech Republic, taking into account the relations between the central bank (discount rate) and commercial banks (market interest rates). The aim of this paper is to present and explain the loss mechanism of control potential of the discount rate as the manipulated variable (u(t)) in process of the market interest rate regulation. The cause of the discussed loss is hysteresis-type nonlinearity, which the Czech banking system has exhibited, while the commercial banks themselves act as linear subsystem (static characteristics). The novelty of the paper consist mainly in the fact, that primarily cybernetic problem (failure of feedback control system) is solved by using the methodology of the behavioral finance. |