The credit view, financial announcements and interest rate responses

The traditional monetarist view is upheld over the credit view as shown by the non-effects of business loan announcements of commercial banks on market interest rates. Credit view proponents have argued that aggregate commercial bank lending decisions have strong macroeconomic effects while the monetarist view holds that it is sufficient to consider the liability side of the banking sectors's balance sheet in analyzing economic outlook. Unexpected money supply developments, however, are found to cause interest rate adjustments. Several limitations of this study are spelled out, though.