IDEAS home Printed from https://ideas.repec.org/a/fip/fedhle/00009.html
   My bibliography  Save this article

What Is the Impact of a Low Interest Rate Environment on Bank Profitability?

Author

Listed:
  • Hesna Genay
  • Rich Podjasek

Abstract

The economic conditions and low interest rate environment of recent years have been challenging for banks that rely on a wide spread between long- and short-maturity yields to generate earnings. The authors? analysis indicates that a low interest rate environment is associated with decreased profitability for banks, particularly for small institutions. However, the estimated negative effects on bank profits are economically small and are outweighed by the likely positive effects on profits of low interest rates boosting economic activity.

Suggested Citation

  • Hesna Genay & Rich Podjasek, 2014. "What Is the Impact of a Low Interest Rate Environment on Bank Profitability?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Jul.
    • Handle: RePEc:fip:fedhle:00009
    as

    Download full text from publisher

    File URL: http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2014/cfljuly2014_324.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    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:fip:fedhle:00009. 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: Lauren Wiese (email available below). General contact details of provider: https://edirc.repec.org/data/frbchus.html .

    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.