Contractual Savings Institutions and Banks' Stability and Efficiency

27 Pages Posted: 20 Apr 2016

See all articles by Gregorio Impavido

Gregorio Impavido

International Monetary Fund (IMF); World Bank

Thierry Tressel

International Monetary Fund (IMF) - Research Department

Alberto R. Musalem

World Bank

Date Written: January 4, 2002

Abstract

This paper argues that contractual savings (assets of pension funds and life insurance companies) contribute to the improvement of banks' efficiency, credit, and liquidity risk. The authors use bank level panel data across countries to assess the impact of contractual savings on bank efficiency and lending behavior. They concentrate on profitability measures and on term transformation and credit risk indicators.

Impavido, Musalem, and Tressel analyze the relationship between the development of contractual savings institutions and banks' efficiency, credit, and liquidity risks. They discuss the potential mechanisms through which the development of contractual savings institutions may affect the banking sector. They show that the development of contractual savings institutions has a significant impact on bank spreads and loan maturity.

After controlling for banks' characteristics, macroeconomic factors, and more standard indicators of financial development, they show that the development of contractual savings institutions is associated with increased efficiency of the banking system and greater resilience to credit and liquidity risks.

This paper - a product of the Financial Sector Development Department - is part of a larger effort in the department to study the effects of contractual savings on financial markets. The authors may be contacted at gimpavido@worldbank.org, amusalem@worldbank.org, or tressel@delta.ens.fr.

Suggested Citation

Impavido, Gregorio and Tressel, Thierry and Musalem, Alberto R., Contractual Savings Institutions and Banks' Stability and Efficiency (January 4, 2002). World Bank Policy Research Working Paper No. 2751. Available at SSRN: https://ssrn.com/abstract=634464

Gregorio Impavido (Contact Author)

International Monetary Fund (IMF) ( email )

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Washington, DC 20431
United States

HOME PAGE: http://www.imf.org

World Bank ( email )

1818 H Street, N.W.
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Thierry Tressel

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Alberto R. Musalem

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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