Republic of Azerbaijan: Selected Issues
June 11, 2014
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This Selected Issues paper uses a bank-level panel dataset to investigate the determinants of bank interest spreads in Azerbaijan over 2002–2013. The dealership model of Ho and Saunders is applied, supplemented by market structure and macroeconomic environment variables, to assess the extent to which high spreads of banks in Azerbaijan can be related to bank-specific variables or to a low degree of competition, controlling for macroeconomic factors. It is found that interest spreads are affected by operation cost efficiency, credit risk, liquidity risk, bank size, bank diversification, banking sector competition, policy rate, and reserve requirement.
Subject: Banking, Commercial banks, Credit, Credit risk, Financial institutions, Financial markets, Financial regulation and supervision, Financial sector development, Market risk, Money
Keywords: bank, bank diversification, Central and Eastern Europe, Central Asia, Central Asia and the Caucasus, Commercial banks, CR, Credit, Credit risk, credit to the private sector, economy, Europe, Financial sector development, Global, growth economy, ISCR, Market risk, private sector credit, private sector development, right, transition economy
Pages:
29
Volume:
2014
DOI:
Issue:
160
Series:
Country Report No. 2014/160
Stock No:
1AZEEA2014002
ISBN:
9781498314473
ISSN:
1934-7685
