The University of Southampton
University of Southampton Institutional Repository

The impact of market power and funding strategy on bank-interest margins

The impact of market power and funding strategy on bank-interest margins
The impact of market power and funding strategy on bank-interest margins

This paper investigates the implications of market power and funding strategics for bank-interest margins, using a sample of 978 banks in 55 emerging and developing countries over an eight-year period. 2000- 2007. We provide additional insight by examining the complex interlocking of three key variable? that arc important for regulators: the degree of market power, funding sources and bank performance. The result? show that market power increases when banks use internal funding to diversify into non-interest income- generating activities. We also find that the high net-interest margins of banks in emerging and developing countries can be explained by the degree of market power, credit risk, and implicit interest payments. In addition, our results suggest that interest margins among banks with market power arc significantly more sensitive to internally generated funds than they arc to deposit and wholesale funding.

78-98
Taylor and Francis
Amidu, Mohammed
84e5194f-4087-4dd4-b009-89bbd2dfdb3f
Wolfe, Simon
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Girardone, C.
Hamill, P.A.
Wilson, J.O.S.
Amidu, Mohammed
84e5194f-4087-4dd4-b009-89bbd2dfdb3f
Wolfe, Simon
9a2367fc-36cc-496a-bbd2-e7346bcbb19e
Girardone, C.
Hamill, P.A.
Wilson, J.O.S.

Amidu, Mohammed and Wolfe, Simon (2016) The impact of market power and funding strategy on bank-interest margins. In, Girardone, C., Hamill, P.A. and Wilson, J.O.S. (eds.) Contemporary Issues in Financial Institutions and Markets. Taylor and Francis, pp. 78-98.

Record type: Book Section

Abstract

This paper investigates the implications of market power and funding strategics for bank-interest margins, using a sample of 978 banks in 55 emerging and developing countries over an eight-year period. 2000- 2007. We provide additional insight by examining the complex interlocking of three key variable? that arc important for regulators: the degree of market power, funding sources and bank performance. The result? show that market power increases when banks use internal funding to diversify into non-interest income- generating activities. We also find that the high net-interest margins of banks in emerging and developing countries can be explained by the degree of market power, credit risk, and implicit interest payments. In addition, our results suggest that interest margins among banks with market power arc significantly more sensitive to internally generated funds than they arc to deposit and wholesale funding.

Full text not available from this repository.

More information

Published date: 14 April 2016

Identifiers

Local EPrints ID: 413511
URI: https://eprints.soton.ac.uk/id/eprint/413511
PURE UUID: 98cb26e1-dc66-4318-8f0c-a738626b9ce7
ORCID for Simon Wolfe: ORCID iD orcid.org/0000-0001-9815-9535

Catalogue record

Date deposited: 25 Aug 2017 16:31
Last modified: 30 Jul 2019 00:39

Export record

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton: eprints@soton.ac.uk

ePrints Soton supports OAI 2.0 with a base URL of https://eprints.soton.ac.uk/cgi/oai2

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×