Determinants of Bank Interest Margins in the Caucasus and Central Asia

Author/Editor:

Raja Almarzoqi ; Sami Ben Naceur

Publication Date:

April 29, 2015

Electronic Access:

Free Full Text. 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:

In this paper, we use a bank-level panel dataset to investigate the determinants of bank interest margins in the Caucasus and Central Asia (CCA) over the period 1998–2013. We apply the dealership model of Ho and Saunders (1981) and its extensions to assess the extent to which high spreads of banks in the CCA can be related to bank-specific variables, to competition, and to macroeconomic factors. We find that interest spreads are affected by operating cost, credit risk, liquidity risk, bank size, bank diversification, banking sector competition, and macroeconomic policies; but the impact depends on the country.

Series:

Working Paper No. 15/87

Subject:

English

Publication Date:

April 29, 2015

ISBN/ISSN:

9781484342817/1018-5941

Stock No:

WPIEA2015087

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

29

Please address any questions about this title to publications@imf.org