IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc13/80029.html
   My bibliography  Save this paper

What determines the interest margin? An analysis of the German banking system

Author

Listed:
  • Karmann, Alexander
  • Bühn, Andreas
  • Pedrotti, Marco

Abstract

This paper analyzes the determinants of the interest margin of German banks over the period 1995-2007, explicitly addressing differences among different bank groups. We use three empirical models to focus on the following aspects: the time evolution of the interest margin, the average differences across groups, and the presence of autoregressive effects. For each model our results show that the interest margin can be mainly explained by market power and inefficiency, the influence of which is particularly high for cooperative banks. The Winner s Curse phenomenon and the cross-subsidization strategy negatively influence the margin of private banks.

Suggested Citation

  • Karmann, Alexander & Bühn, Andreas & Pedrotti, Marco, 2013. "What determines the interest margin? An analysis of the German banking system," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80029, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc13:80029
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/80029/1/VfS_2013_pid_200.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Zarruk, Emilio R., 1989. "Bank spread with uncertain deposit level and risk aversion," Journal of Banking & Finance, Elsevier, vol. 13(6), pages 797-810, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:zbw:vfsc13:80029. 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: (ZBW - German National Library of Economics). General contact details of provider: http://edirc.repec.org/data/vfsocea.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.