Determinants of the Interest Rate Margins of Austrian Banks
Bank interest rate margins have been declining in most EU Member States over the last decade. Drawing on a unique sample of supervisory data for the Austrian banking system from 1996 to 2005, this paper investigates the determinants of bank interest rate margins. The main factors driving the reduction of Austrian banks’ interest rate margins are decreasing operating costs, the growing importance of foreign currency lending combined with a rising share of non interest revenues as well as increasing competition. In contrast to findings in the literature we document a positive effect of relationship banking on margins, with the erosion of relationship banking being another reason for the decline in interest margins.
Volume (Year): (2006)
Issue (Month): 12 ()
|Contact details of provider:|| Postal: |
Phone: +43/1/404 20 3126
Fax: +43/1/404 20 3199
Web page: http://www.oenb.at
More information through EDIRC
|Order Information:|| Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Boot, Arnoud W. A., 2000. "Relationship Banking: What Do We Know?," Journal of Financial Intermediation, Elsevier, vol. 9(1), pages 7-25, January.
- Athanasoglou, Panayiotis & Brissimis, Sophocles & Delis, Matthaios, 2005.
"Bank-specific, industry-specific and macroeconomic determinants of bank profitability,"
32026, University Library of Munich, Germany.
- Athanasoglou, Panayiotis P. & Brissimis, Sophocles N. & Delis, Matthaios D., 2008. "Bank-specific, industry-specific and macroeconomic determinants of bank profitability," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(2), pages 121-136, April.
- Panayiotis P. Athanasoglou & Sophocles N. Brissimis & Matthaios D. Delis, 2005. "Bank-Specific, Industry-Specific and Macroeconomic Determinants of Bank Profitability," Working Papers 25, Bank of Greece.
- Angbazo, Lazarus, 1997. "Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking," Journal of Banking & Finance, Elsevier, vol. 21(1), pages 55-87, January.
- Allen, Linda, 1988. "The Determinants of Bank Interest Margins: A Note," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 23(02), pages 231-235, June.
- Elsas, Ralf & Hackethal, Andreas & Holzhaeuser, Markus, 2006. "The Anatomy of Bank Diversification," Discussion Papers in Business Administration 1167, University of Munich, Munich School of Management.
- Jesús Crespo-Cuaresma & Adelina Gschwandtner, 2003.
"The competitive environment hypothesis revisited: Nonlinearity, nonstationrity and profit persistence,"
Vienna Economics Papers
0316, University of Vienna, Department of Economics.
- Jesus Crespo Cuaresma & Adelina Gschwandtner, 2006. "The competitive environment hypothesis revisited: non-linearity, nonstationarity and profit persistence," Applied Economics, Taylor & Francis Journals, vol. 38(4), pages 465-472.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Elsas, Ralf, 2005. "Empirical determinants of relationship lending," Journal of Financial Intermediation, Elsevier, vol. 14(1), pages 32-57, January.
- Angelini, Paolo & Cetorelli, Nicola, 2003. " The Effects of Regulatory Reform on Competition in the Banking Industry," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(5), pages 663-84, October.
- J.A. Bikker & H. Hu, 2003. "Cyclical Patterns in Profits, Provisioning and Lending of Banks," DNB Staff Reports (discontinued) 86, Netherlands Central Bank.
- Demirguc, Asli & Huizinga, Harry, 1999.
"Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence,"
World Bank Economic Review,
World Bank Group, vol. 13(2), pages 379-408, May.
- Demirguc-Kunt, Asli & Huizinga, Harry, 1998. "Determinants of commercial bank interest margins and profitability : some international evidence," Policy Research Working Paper Series 1900, The World Bank.
- Ergungor, O. Emre, 2005. "The profitability of bank-borrower relationships," Journal of Financial Intermediation, Elsevier, vol. 14(4), pages 485-512, October.
When requesting a correction, please mention this item's handle: RePEc:onb:oenbfs:y:2006:i:12:b:4. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stefan W. Schmitz)
If references are entirely missing, you can add them using this form.