The paper provides a model of the banking firm in the macroeconomic intended to explain the determination of the spread between the banks' loan and deposit rates. The model focuses on the resource cost of capital in the detrmination of the spread. A statistical result confirms the prediction of the model, that is, the bank's spread is higher in low incomes economies.
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Paper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number
092.