This paper focuses on the monetary policy channels in an imperfect competition framework of the banking sector. It emphasizes the relationship between the commercial banks rate and the lending rate of the central bank. The framework of imperfect competition is provided by the Salop [1979] model...

In the modern theory of finance, the valuation of derivative assets is commonly based on a replication argument. When there are transaction costs, this argument is no longer valid. In this paper, we try to address the general problem of finding the optimal portfolio among those which dominate a...