Prime Rates

Paper Summary:

This paper contends that although prime rates, prime lending rates and prime interest rates are but small tools within the worldwide banking systems they do offer the ultimate objective of capital account convertibility. However, the paper explains that the study of these rates throughout the worldwide banking systems must be undertaken from an historical perspective. The paper states that when this is accomplished one readily observes that these rates, however stated, affect almost every living creature in the world.

Outline
Thesis Statement
The Fundamentals of Prime Rates
The Basics
The History of Interest
Conclusions

From the Paper:

"With the ultimate objective of capital account convertibility in mind, prime rates should be to deepen and integrate financial markets, raise access to global savings, discipline domestic policies and policy makers, and furthermore allow greater freedom for individual decision-making. The theoretical framework underlying the use of prime rates is spelled out primarily by nations, banking institutions both global and national, so that monetarists can presume that restraining fiscal deficit and the money supply shall result in several controls, inflation and recession being chief among them. This, of course, is a much more easily stated theory than practical application Worldwide can and does incorporate throughout the various economies of the World. "

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