IDEAS home Printed from https://ideas.repec.org/a/ids/ijmefi/v16y2023i1p23-39.html
   My bibliography  Save this article

The impact of low interest rates on the bank profitability

Author

Listed:
  • Tomáš Fabian
  • Kristína KoÄ iÅ¡ová

Abstract

The recent negative interest rate policy implemented by the European Central Bank (ECB) has raised concerns about the impact of interest rates on bank profitability. Therefore, this paper aims to study the determinants of banking profitability in the European Union (EU) countries. Using annual macro-level data for the period 2008-2018, we examine the impact of banking sector, macroeconomic, and competition variables on the aggregate profitability of the banking sectors by using a panel data methodology. We find a positive relationship between short-term rates and negative relationship long-term rates. Hence, our findings indicate that monetary policy significantly influences bank profits in EU countries.

Suggested Citation

  • Tomáš Fabian & Kristína KoÄ iÅ¡ová, 2023. "The impact of low interest rates on the bank profitability," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 16(1), pages 23-39.
    • Handle: RePEc:ids:ijmefi:v:16:y:2023:i:1:p:23-39
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=130217
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijmefi:v:16:y:2023:i:1:p:23-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=218 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.