Interest rate liberalization and consumer behaviour in Malta

Abstract

Freeing the financial sector from government interference has been an important element of market reforms in the developing world in recent years. This dissertation analyses the effect similar reforms could have had on savings and consumer behaviour in the Maltese economy. The personal sector is of crucial importance as a source of saving in Malta. It accounted for about 48% of all formal savings in 1995. Though doubt exists whether the impact of interest rate changes on savings and consumer behaviour is significant, the importance of saving in the Maltese economy motivates this analysis.