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Estimates of bank-level funding costs in South Africa

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  • Tim Olds

  • Daan Steenkamp

Abstract

We develop a new dataset of bank-level balance sheets data to estimate bank-level funding costs. These estimates are useful for monitoring of funding pressures and other risks to the banking sector as well as understanding the impact of prudential regulations and market conditions on the transmission of monetary policy. We show that bank funding cost spreads are materially higher now than before the Global Financial Crisis of 2008, in spite of lower interest rates. During the Covid-19 crisis, we show that aggregate funding costs have fallen in level (i.e. percentage) terms, but that funding costs have increased when expressed relative to reference rates. We show that the relative cost of raising deposits has increased, as deposit rates have not fallen by as much as the repurchase rate and other money market rates.

Suggested Citation

  • Tim Olds & Daan Steenkamp, "undated". "Estimates of bank-level funding costs in South Africa," ERSA Working Paper Series v::y:2021:i::id:67, Economic Research Southern Africa.
    • Handle: RePEc:rza:ersawp:v::y:2021:i::id:67
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    File URL: https://ersawps.org/index.php/working-paper-series/article/view/67/44
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    Cited by:

    1. Keagile Lesame & Richard Kima, "undated". "Macroeconomic effects of lowering South Africa’s inflation target: An SVAR analysis," ERSA Working Paper Series v::y:2025:i::id:218, Economic Research Southern Africa.
    2. Jens H. E. Christensen & Daan Steenkamp, 2026. "A market-based assessment of the outlook for inflation: Expectations and monetary policy in South Africa," WIDER Working Paper Series wp-2026-21, World Institute for Development Economic Research (UNU-WIDER).

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