Banking Spreads in Latin America

Author/Editor:

R. G Gelos

Publication Date:

February 1, 2006

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Intermediation spreads in Latin America are high by international standards. This paper examines the determinants of bank interest margins in that region using bank and country-level data from 85 countries, including 14 Latin American economies. The results suggest that Latin America has higher interest rates, less efficient banks, and larger reserve requirements than other regions and that these factors have a significant impact on spreads. However, Latin American countries do not differ markedly from their peers in other aspects that are found important in determining the cost of financial intermediation, such as inflation and bank profit taxation.

Series:

Working Paper No. 06/44

Subject:

English

Publication Date:

February 1, 2006

ISBN/ISSN:

9781451863048/1018-5941

Stock No:

WPIEA2006044

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

31

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