Monetary policy and the commercial banks: an overview

Ismail, Abdul Ghafar and Smith, Peter (1993) Monetary policy and the commercial banks: an overview Jurnal Ekonomi Malaysia, 27, pp. 29-35.


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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 monetary policy has been undermined. The deregulation of commercial banks has changed the transmission mechanism for monetary policy from money supply to interest rates and bank credit

Item Type: Article
ISSNs: 0127-1962 (print)
Related URLs:
ePrint ID: 33030
Date :
Date Event
September 1993Published
Date Deposited: 23 May 2008
Last Modified: 16 Apr 2017 22:18
Further Information:Google Scholar

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