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The Determinants of the Interest Rate Margins of Czech Banks

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Abstract

The author examines the determinants of the interest rate margins of Czech banks by employing a bank-level dataset at quarterly frequency in 2000–2006. His main results are as follows. He finds that more efficient banks exhibit lower margins and there is no evidence that banks with lower margins compensate themselves with higher fees. Price stability contributes to lower margins. Higher capital adequacy is associated with lower margins, contributing to banking stability. Overall, the results indicate that the determinants of the interest rate margins of Czech banks are largely similar to those reported in other studies for developed countries.

Suggested Citation

  • Roman Horváth, 2009. "The Determinants of the Interest Rate Margins of Czech Banks," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(2), pages 128-136, June.
  • Handle: RePEc:fau:fauart:v:59:y:2009:i:2:p:128-136
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    Cited by:

    1. Hainz, Christa & Horváth, Roman & Hlaváček, Michal, 2014. "The interest rate spreads in the Czech Republic: Different loans, different determinants?," Economic Systems, Elsevier, vol. 38(1), pages 43-54.
    2. Koffie Ben Nassar & Edder Martinez & Anabel Pineda, 2014. "Determinants of Banks' Net Interest Margins in Honduras," IMF Working Papers 14/163, International Monetary Fund.
    3. repec:sgm:jbfeuw:v:1:y:2017:i:7:p:5-27 is not listed on IDEAS
    4. Horváth, Roman & Podpiera, Anca, 2012. "Heterogeneity in bank pricing policies: The Czech evidence," Economic Systems, Elsevier, vol. 36(1), pages 87-108.
    5. repec:ers:journl:v:xx:y:2017:i:2a:p:90-108 is not listed on IDEAS

    More about this item

    Keywords

    commercial banks; interest rate margins; bank efficiency;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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