Interest Rate Spreads in the Eastern Caribbean

ByRuby Randall

April 1, 1998

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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

This 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. The paper concludes that operating costs appear to be a key determinant of observed interest rate spreads, giving rise to the policy recommendation that efforts to expand the market size of efficient banks might help pave the way for greater efficiency.

Subject: 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

Pages:
39
Volume:
1998
DOI:
https://doi.org/10.5089/9781451847918.001
Issue:
059
Series:
Working Paper No. 1998/059
Stock No:
WPIEA0591998
ISBN:
9781451847918
ISSN:
1018-5941

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