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Bank Interest Rate Margins and Uncertainty: A Forward-Looking Approach

Author

Listed:
  • Baki Cem Şahin

    (Central Bank of Turkey)

Abstract

The behavior of banks in setting interest rate margins has been in the interest of a variety of groups including management, shareholders, and policymakers. On this basis, the literature has employed a wide range of micro and macroeconomic factors in analyzing the interest rate margin. This study focuses more on uncertainty and investigates the role of uncertainty on bank interest margin setting in turkey. The analysis shows that higher uncertainty is associated with higher interest rate margins both in the short term and long term.

Suggested Citation

  • Baki Cem Şahin, 2023. "Bank Interest Rate Margins and Uncertainty: A Forward-Looking Approach," Journal of Finance Letters (Maliye ve Finans Yazıları), Maliye ve Finans Yazıları Yayıncılık Ltd. Şti., vol. 38(120), pages 1-10, October.
    • Handle: RePEc:acc:malfin:v:38:y:2023:i:120:p:1-10
    DOI: https://doi.org/10.33203/mfy.1105753
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    References listed on IDEAS

    as
    1. Claeys, Sophie & Vander Vennet, Rudi, 2008. "Determinants of bank interest margins in Central and Eastern Europe: A comparison with the West," Economic Systems, Elsevier, vol. 32(2), pages 197-216, June.
    2. Tarsila Segalla Afanasieff & Priscilla Maria Villa Lhacer & Márcio I. Nakane, 2002. "The Determinants of Bank Interest Spread in Brazil," Money Affairs, CEMLA, vol. 0(2), pages 183-207, July-Dece.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Banking; Interest Rate Margin; Uncertainty; Cointegration;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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