The Monetary Policy Regime and Banking Spreads in Barbados

Author/Editor:

Laura Valderrama ; Wendell A. Samuel

Publication Date:

September 1, 2006

Electronic Access:

Free Full Text (PDF file size is 415 KB).Use the free Adobe Acrobat Reader to view this PDF file

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:

The paper analyzes the determinants of banking spreads in Barbados, with a view to identifying the role of the monetary policy regime in explaining high spreads. The paper finds that interest rate spreads for Barbados are higher than would be suggested by its macroeconomic performance. Banking concentration and bank-specific variables, including bank size and provisions for nonperforming loans, do not have an important role in explaining variations in bank spreads. Rather, it appears that monetary policy variables, such as reserve requirements and capital controls, are the most important determinants of spreads.

Series:

Working Paper No. 06/211

Subject:

English

Publication Date:

September 1, 2006

ISBN/ISSN:

9781451864717/1018-5941

Stock No:

WPIEA2006211

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

24

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