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Interest Rates on Short- and Long-term Loans: Factors Affecting Their Formation and the Relevance of Regulatory Measures

Finance: Theory and Practice | 2026

Paper Details

Authors: Byvshev V.A.; Meshkova E.I.

DOI: 10.26794/2587-5671-2026-30-2-33-47

Journal: Finance: Theory and Practice

Year: 2026

Publisher: Financial University under The Government of Russian Federation

Document Type: Article

Open Access: All Open Access; Gold Open Access

Cited by: 0

Abstract

the aim of the article is to study the factors that influence the bank short-term and long-term interest rates. The relevance: in modern conditions the interest rate policy is considered not only as a way to ensure bank efficiency and financial stability, but also as a tool to stimulate economic activity. The purpose of the study is to identify the factors that determine the short-term and long-term interest rates and, on this basis, to determine economic and/or regulatory measures to improve the bank interest rate policy for the purposes of national economy. The scientific novelty includes the identification of the factors that determine the banking interest rate policy in the short-term and long-term aspects. The research methodology is based on statistical modeling using the vector autoregressive distributed lag model. The statistical database includes the Russian banking sector financial indicators and a significant range of macroeconomic variables. Results. The authors identified the factors of bank loans interest rates. The key parameters include macroeconomic variables: the money market interest rate and the structural liquidity deficit of the banking sector. The impact of macroeconomic parameters differs with respect to long-term and short-term rates, as nominal GDP is significant only for long-term interest rates. Loan portfolio quality indicators do not affect interest rates. Based on the study's findings, the authors proposed directions to develop the current banking regulation: to set regulatory alignment between the credit risk premium and the loan loss reserve requirement; to limit the corporate floating rates lending; to introduce an additional credit instrument of the Bank of Russia —a secured loan to systemically important banks for a one year. © Byvshev V.A., Meshkova E.I., 2026.

Keywords

bank; interest rates; pricing factors; short-term and long-term interest rates