Benchmarking Costs of Financial Intermediation Around the World

44 Pages Posted: 28 Aug 2018

Date Written: June 19, 2018

Abstract

The costs of financial intermediation have important consequences for financial development. Using bank-level data for 160 countries during 2005-14, this paper analyzes the composition and sources of bank net interest margins. First, it uses an accounting decomposition framework to provide summary statistics on the size of net interest margins and highlight the cost and profit components in countries, regions, and income groups. Second, it uses regression analysis to examine the underlying bank-level, structural, macroeconomic, and institutional determinants of net interest margins. Finally, the paper uses the results of the econometric analysis to construct country-level bar charts of relative contributing factors to financial intermediation costs. The results provide evidence-based guidance on key areas of structural reforms to reduce the costs of financial intermediation.

Keywords: Financial Crisis Management & Restructuring, Fiscal & Monetary Policy, Inflation, Macro-Fiscal Policy, Public Sector Economics, Economic Adjustment and Lending, Taxation & Subsidies, Public Finance Decentralization and Poverty Reduction, Industrial Economics, Economic Theory & Research, Economic Growth

Suggested Citation

Calice, Pietro and Zhou, Nan, Benchmarking Costs of Financial Intermediation Around the World (June 19, 2018). World Bank Policy Research Working Paper No. 8478, Available at SSRN: https://ssrn.com/abstract=3238312

Pietro Calice (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Nan Zhou

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
226
Abstract Views
507
Rank
278,958
PlumX Metrics