El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition

This technical note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016. The Salvadoran financial system lags behind its peers in terms of depth put it outperforms the...

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Main Author:	World Bank
Format:	Report
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	FINANCE MANAGEMENT REGULATION banking financial system competition disclosure
Online Access:	http://documents.worldbank.org/curated/en/590981487931708215/El-Salvador-Financial-sector-assessment-program-efficiency-and-competition http://hdl.handle.net/10986/26277

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recordtype	oai_dc
spelling	okr-10986-262772021-05-25T08:58:26Z El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition World Bank FINANCE MANAGEMENT REGULATION banking financial system competition disclosure This technical note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016. The Salvadoran financial system lags behind its peers in terms of depth put it outperforms them in terms of competition and efficiency. Given the country’s relative low financial depth but competitive environment, there is room for expansion and financial development which can provide greater funding for the productive activities of the private sector. This technical note takes four main approaches to examine the extent of competition and efficiency of the Salvadoran banking sector. First, it examines bank entry and exit regulations and bank transparency to determine whether the existing framework promotes contestability and competition. Second, the note evaluates the degree of concentration in the banking sector and estimates direct measures of competition by calculating the H-statistic for the Salvadoran banking sector and by comparing it to those obtained for its regional peers. Third, the note evaluates efficiency by examining the behavior of bank spreads, profitability and financial intermediation margins and costs. Fourth, the note looks into the different segments of the loan market to evaluate how efficiently credit is being allocated. Finally the note ends with some policy recommendations. The document contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap. 2017-03-15T21:32:35Z 2017-03-15T21:32:35Z 2016-11 Report http://documents.worldbank.org/curated/en/590981487931708215/El-Salvador-Financial-sector-assessment-program-efficiency-and-competition http://hdl.handle.net/10986/26277 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Financial Sector Assessment Program Economic & Sector Work Latin America & Caribbean El Salvador
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	FINANCE MANAGEMENT REGULATION banking financial system competition disclosure
spellingShingle	FINANCE MANAGEMENT REGULATION banking financial system competition disclosure World Bank El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition
geographic_facet	Latin America & Caribbean El Salvador
description	This technical note was prepared in the context of a World Bank Financial Sector Assessment Program mission in the Republic of El Salvador in March 2016. The Salvadoran financial system lags behind its peers in terms of depth put it outperforms them in terms of competition and efficiency. Given the country’s relative low financial depth but competitive environment, there is room for expansion and financial development which can provide greater funding for the productive activities of the private sector. This technical note takes four main approaches to examine the extent of competition and efficiency of the Salvadoran banking sector. First, it examines bank entry and exit regulations and bank transparency to determine whether the existing framework promotes contestability and competition. Second, the note evaluates the degree of concentration in the banking sector and estimates direct measures of competition by calculating the H-statistic for the Salvadoran banking sector and by comparing it to those obtained for its regional peers. Third, the note evaluates efficiency by examining the behavior of bank spreads, profitability and financial intermediation margins and costs. Fourth, the note looks into the different segments of the loan market to evaluate how efficiently credit is being allocated. Finally the note ends with some policy recommendations. The document contains technical analysis and detailed information underpinning the FSAP assessment’s findings and recommendations. Further information on the FSAP program can be found at www.worldbank.org/fsap.
format	Report
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition
title_short	El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition
title_full	El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition
title_fullStr	El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition
title_full_unstemmed	El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition
title_sort	el salvador financial sector assessment program development module : efficiency and competition
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/590981487931708215/El-Salvador-Financial-sector-assessment-program-efficiency-and-competition http://hdl.handle.net/10986/26277
_version_	1764461580093751296

El Salvador Financial Sector Assessment Program Development Module : Efficiency and Competition

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