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Bank Interest Rate Margins and Uncertainty: A Forward-Looking Approach

Year 2023, , 1 - 10, 16.10.2023
https://doi.org/10.33203/mfy.1105753

Abstract

The behavior of banks in setting interest rate margins has been in the interest of a variety of groups including management, shareholders, and policymakers. On this basis, the literature has employed a wide range of micro and macroeconomic factors in analyzing the interest rate margin. This study focuses more on uncertainty and investigates the role of uncertainty on bank interest margin setting in Turkey. The analysis shows that higher uncertainty is associated with higher interest rate margins both in the short term and long term.

References

  • Afanasieff, Tarsila Segalla, Priscilla Maria Villa Lhacer, and Marcio Nakane, 2002, The Determinants of Bank Interest Spread in Brazil, Money Affairs XV, 183–207.
  • Angbazo, Lazarus, 1997, Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking, Journal of Banking & Finance 21, 55–87.
  • Carbo Valverde, Santiago, Rafael Lopez Del Paso, and Francisco Rodríguez Fernández, 2007, Financial Innovations in Banking: Impact on Regional Growth, Regional Studies 41, 311–326.
  • Catão, Luis, 1998, Intermediation Spreads in a Dual Currency Economy; Argentina in the 1990s. IMF Working Papers, International Monetary Fund.
  • Claeys, Sophie, and Rudi Vander Vennet, 2008, Determinants of bank interest margins in Central and Eastern Europe: A comparison with the West, Economic Systems 32, 197–216.
  • Demirguc-Kunt, Asli, and Harry Huizinga, 1999, Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence, World Bank Economic Review 13, 379–408.
  • Engle, Robert, and Clive Granger, 1987, Co-integration and Error Correction: Representation, Estimation, and Testing, Econometrica 55, 251–276.
  • Erol, H., 2007. Bankalarda net faiz marjının belirleyicileri, risk duyarlılığı ve politika önerileri. Uzmanlık Yeterlilik Tezi, Türkiye Cumhuriyet Merkez Bankası.
  • Gelos, R Gaston, 2006, Banking Spreads in Latin America. IMF Working Papers, International Monetary Fund.
  • Guevara, Juan Fernández De, and Joaquin Maudos, 2002, Inequalities in the efficiency of the banking sectors of the European Union, Applied Economics Letters 9, 541–544.
  • Hawtrey, Kim, and Hanyu Liang, 2008, Bank interest margins in OECD countries, The North American Journal of Economics and Finance 19, 249–260.
  • Ho, Thomas S Y, and Anthony Saunders, 1981, The Determinants of Bank Interest Margins: Theory and Empirical Evidence, The Journal of Financial and Quantitative Analysis 16, 581–600.
  • Johansen, Soren, and Katarina Juselius, 1990, Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money, Oxford Bulletin of Economics and Statistics 52, 169–210.
  • Klein, Michael A, 1971, A Theory of the Banking Firm, Journal of Money, Credit and Banking 3, 205–218.
  • Martinez Peria, Maria, and Ashoka Mody, 2004, How Foreign Participation and Market Concentration Impact Bank Spreads: Evidence from Latin America, Journal of Money, Credit and Banking 36, 511–537.
  • O’Hara, MAUREEN, 1983, A Dynamic Theory of the Banking Firm, The Journal of Finance 38, 127–140.
  • Ozdincer, B., Ozyildirim, C., 2010. Türkiye bakacılık sketöründe net faiz marjlarının belirlenmesinde etkin faktörler: Türkiye analizi. İktirat İşletme ve Finans 25(292), 9-27.
  • Pesaran, M, Yongcheol Shin, and Richard Smith, 2001, Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics 16, 289–326.
  • Saunders, Anthony, and Liliana Schumacher, 2000, The determinants of bank interest rate margins: an international study, Journal of International Money and Finance 19, 813–832.

Faiz Oranı Marjının Belirlenmesinde Belirsizliğin Banka Davranışı Üzerindeki Etkisi

Year 2023, , 1 - 10, 16.10.2023
https://doi.org/10.33203/mfy.1105753

Abstract

Bankaların faiz oranı marjlarını belirleme davranışı, yönetim, hissedarlar ve politika yapıcılar dahil olmak üzere çeşitli grupların ilgi odağında
olmuştur. Bu noktada, literatür, faiz oranı marjını analiz ederken çok çeşitli mikro ve makroekonomik faktörleri kullanmıştır. Bu çalışma daha çok belirsizliğe odaklanmakta ve belirsizliğin Türkiye’de banka faiz marjı belirleme üzerindeki rolünü incelemektedir. Analiz, daha yüksek belirsizliğin hem kısa vadede hem de uzun vadede daha yüksek faiz oranı marjları ile ilişkili olduğunu göstermektedir.

References

  • Afanasieff, Tarsila Segalla, Priscilla Maria Villa Lhacer, and Marcio Nakane, 2002, The Determinants of Bank Interest Spread in Brazil, Money Affairs XV, 183–207.
  • Angbazo, Lazarus, 1997, Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking, Journal of Banking & Finance 21, 55–87.
  • Carbo Valverde, Santiago, Rafael Lopez Del Paso, and Francisco Rodríguez Fernández, 2007, Financial Innovations in Banking: Impact on Regional Growth, Regional Studies 41, 311–326.
  • Catão, Luis, 1998, Intermediation Spreads in a Dual Currency Economy; Argentina in the 1990s. IMF Working Papers, International Monetary Fund.
  • Claeys, Sophie, and Rudi Vander Vennet, 2008, Determinants of bank interest margins in Central and Eastern Europe: A comparison with the West, Economic Systems 32, 197–216.
  • Demirguc-Kunt, Asli, and Harry Huizinga, 1999, Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence, World Bank Economic Review 13, 379–408.
  • Engle, Robert, and Clive Granger, 1987, Co-integration and Error Correction: Representation, Estimation, and Testing, Econometrica 55, 251–276.
  • Erol, H., 2007. Bankalarda net faiz marjının belirleyicileri, risk duyarlılığı ve politika önerileri. Uzmanlık Yeterlilik Tezi, Türkiye Cumhuriyet Merkez Bankası.
  • Gelos, R Gaston, 2006, Banking Spreads in Latin America. IMF Working Papers, International Monetary Fund.
  • Guevara, Juan Fernández De, and Joaquin Maudos, 2002, Inequalities in the efficiency of the banking sectors of the European Union, Applied Economics Letters 9, 541–544.
  • Hawtrey, Kim, and Hanyu Liang, 2008, Bank interest margins in OECD countries, The North American Journal of Economics and Finance 19, 249–260.
  • Ho, Thomas S Y, and Anthony Saunders, 1981, The Determinants of Bank Interest Margins: Theory and Empirical Evidence, The Journal of Financial and Quantitative Analysis 16, 581–600.
  • Johansen, Soren, and Katarina Juselius, 1990, Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money, Oxford Bulletin of Economics and Statistics 52, 169–210.
  • Klein, Michael A, 1971, A Theory of the Banking Firm, Journal of Money, Credit and Banking 3, 205–218.
  • Martinez Peria, Maria, and Ashoka Mody, 2004, How Foreign Participation and Market Concentration Impact Bank Spreads: Evidence from Latin America, Journal of Money, Credit and Banking 36, 511–537.
  • O’Hara, MAUREEN, 1983, A Dynamic Theory of the Banking Firm, The Journal of Finance 38, 127–140.
  • Ozdincer, B., Ozyildirim, C., 2010. Türkiye bakacılık sketöründe net faiz marjlarının belirlenmesinde etkin faktörler: Türkiye analizi. İktirat İşletme ve Finans 25(292), 9-27.
  • Pesaran, M, Yongcheol Shin, and Richard Smith, 2001, Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics 16, 289–326.
  • Saunders, Anthony, and Liliana Schumacher, 2000, The determinants of bank interest rate margins: an international study, Journal of International Money and Finance 19, 813–832.
There are 19 citations in total.

Details

Primary Language English
Subjects Finance
Journal Section Articles
Authors

Baki Cem Şahin 0000-0002-9326-6857

Early Pub Date October 16, 2023
Publication Date October 16, 2023
Submission Date May 31, 2022
Published in Issue Year 2023

Cite

APA Şahin, B. C. (2023). Bank Interest Rate Margins and Uncertainty: A Forward-Looking Approach. Maliye Ve Finans Yazıları(120), 1-10. https://doi.org/10.33203/mfy.1105753

Dergi özellikle maliye, finans ve bankacılık alanlarında faaliyet göstermektedir.