Benchmarking Costs of Financial Intermediation around the World
The costs of financial intermediation have important consequences for financial development. Using bank-level data for 160 countries during 2005-14, this paper analyzes the composition and sources of bank net interest margins. First, it uses an acc...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/675611529434481262/Benchmarking-costs-of-financial-intermediation-around-the-world http://hdl.handle.net/10986/29931 |
| Summary: | The costs of financial intermediation
have important consequences for financial development. Using
bank-level data for 160 countries during 2005-14, this paper
analyzes the composition and sources of bank net interest
margins. First, it uses an accounting decomposition
framework to provide summary statistics on the size of net
interest margins and highlight the cost and profit
components in countries, regions, and income groups. Second,
it uses regression analysis to examine the underlying
bank-level, structural, macroeconomic, and institutional
determinants of net interest margins. Finally, the paper
uses the results of the econometric analysis to construct
country-level bar charts of relative contributing factors to
financial intermediation costs. The results provide
evidence-based guidance on key areas of structural reforms
to reduce the costs of financial intermediation. |
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