Monetary policy on deregulated commercial banks and in the presence of Islamic banks (Ph.D. Thesis)

A combination of several undesirable macroeconomic conditions will contribute to the process of deregulation, and the extent of monetary policy instruments have changed in relation to the perceived liberalization of the economic environment. An increase in the degree of competition, a more efficient distribution of portfolios, and a decrease in the amount of liquidity can all be attributed to decreased regulation in the environment. Structural and regulatory change can have a bearing on the appropriate choice of policy targets and instruments in the context of a portfolio emphasizing market principles for assets and liabilities. Specifically, the inter-bank rate is shown to be a potentially effective target for policy in a deregulated environment.