Bank Profitability and the Business Cycle
39 Pages Posted: 6 Oct 2006
Date Written: September 2006
Abstract
An important element of the macro-prudential analysis is the study of the link between business cycle fluctuations and banking sector profitability and how this link is affected by institutional and structural characteristics. This work estimates a set of equations for net interest income, non-interest income, operating costs, provisions, and profit before taxes, for banks in the main industrialized countries and evaluates the effects on banking profitability of shocks to both macroeconomic and financial factors. Distinguishing mainly the euro area from Anglo-Saxon countries, the analysis also identifies differences in the resilience of the respective banking systems and relates them to the characteristics of their financial structure.
Keywords: bank profitability, economic cycle, macro-prudential analysis
JEL Classification: C53, G21
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Banks with Something to Lose: The Disciplinary Role of Franchise Value
By Rebecca S. Demsetz, Marc R. Saidenberg, ...
-
Are Banks Dead? Or are the Reports Greatly Exaggerated?
By John H. Boyd and Mark Gertler
-
The Decline of Traditional Banking: Implications for Financial Stabilityand Regulatory Policy
-
The Decline of Traditional Banking: Implications for Financial Stability and Regulatory Policy
-
Product Mix and Earnings Volatility at Commercial Banks: Evidence from a Degree of Leverage Model
By Robert Deyoung and Karin P. Roland
-
U.S. Commercial Banking: Trends, Cycles, and Policy
By John H. Boyd and Mark Gertler
-
Capital Ratios as Predictors of Bank Failure
By Arturo Estrella, Sangkyun Park, ...