Interest Rate Spreads in the Eastern Caribbean

IMF Working Papers, April 1, 1998

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Interest Rate Spreads in the Eastern Caribbean

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Bibliographic details

• Authors: Ruby Randall
• Published: April 1, 1998
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451847918.001

Summary

• Author: Ruby Randall
• Date: April 1, 1998
• Paper examines interest rate spreads in the Eastern Caribbean and seeks to explain why they are persistently high by comparison with other low-inflation countries.
• Main conclusion: operating costs appear to be a key determinant of observed interest rate spreads.

Key findings

• Interest rate spreads in the Eastern Caribbean are persistently high relative to other low-inflation countries.
• Operating costs are identified as a key determinant of observed interest rate spreads.

Policy recommendations

• Efforts to expand the market size of efficient banks might help pave the way for greater efficiency.

Subjects and keywords

• Subjects: Banking, Commercial banks, Deposit rates, Financial institutions, Financial regulation and supervision, Financial services, Loan loss provisions, Loans, National accounts, Personal income
• Keywords: bank interest; bank interest rate spread; banking industry; Caribbean; commercial bank; commercial bank costs; Commercial banks; Deposit rates; Eastern Caribbean; ECCB; ECCB aggregate; ECCB area; ECCB interest rate; ECCB loan loss; ECCB rate; interest rate; interest rate spreads; Loan loss provisions; Loans; marginal revenue; overdraft rate; Personal income; return on assets; United States interest rate; WP

Content in this bundle

• Interest Rate Spreads in the Eastern Caribbean - WP/98/59
  • Interest Rate Spreads in the Eastern Caribbean - WP/98/59 (Markdown version)
  • Interest Rate Spreads in the Eastern Caribbean - WP/98/59 (PDF)