The determinants of bank interest rate margins: an international study

This paper studies the determinants of bank net interest margins (NIMs) in six selected European countries and the US during the period 1988–1995 for a sample of 614 banks. We apply the Ho and Saunders model (Ho, T., Saunders, A., 1981. The determinants of bank interest margins: theory and empirical evidence. Journal of Financial and Quantitative Analyses 16, 581–600) to a multicountry setting and decompose bank margins into a regulatory component, a market structure component and a risk premium component. The regulatory components in the form of interest-rate restrictions on deposits, reserve requirements and capital-to-asset ratios have a significant impact on banks NIMs. The empirical results suggest an important policy trade-off between assuring bank solvency—high capital-to-asset ratios—and lowering the cost of financial services to consumers—low NIMs. The more segmented or restricted the banking system—both geographically and by activity—the larger appears to be the monopoly power of existing banks, and the higher their spreads. Macro interest-rate volatility was found to have a significant impact on bank NIMs; this suggests that macro policies consistent with reduced interest-rate volatility could have a positive effect in reducing bank margins.     

Categories and causes of bank distress during the great depression, 1929–1933: The illiquidity versus insolvency debate revisited

During the contraction from 1929 to 1933, the Federal Reserve System tracked changes in the status of all banks operating in the United States and determined the cause of each bank suspension. This essay analyzes chronological patterns in aggregate series constructed from that data. The analysis demonstrates both illiquidity and insolvency were substantial sources of bank distress. Periods of heightened distress were correlated with periods of increased illiquidity. Contagion via correspondent networks and bank runs propagated the initial banking panics. As the depression deepened and asset values declined, insolvency loomed as the principal threat to depository institutions.     

日本银企信用关系的约束机制分析

战后,基于日本企业融资结构的特点,日本银企之间形成了一种长期的交易关系,其得以维系依赖于日本主银行制度与企业内在机制约束作用的双重迭加。分析表明,充分发挥作为企业主要金融援助者的银行对于企业的指导与监督作用是实现银企信用关系约束机制有效性的关键。     

中国经济发展必须直面输入型金融危机

中国大宗商品进出口价格的巨大背离、中国国内价格的背离将导致企业整体利润下降或亏损增加。由于我国融资体系以间接融资为主且数家国有银行占主导。因此企业经营风险将集中转移至银行体系，直接表现为银行呆坏账提高。这种风险积聚到一定程度将可能以金融危机形式表现出来，而这种金融危机不同于传统意义的金融危机，而是由于中国对外经济依存度过高、国际市场大宗商品和制成品不合理的定价体系所造成的。     

Does Bank Monitoring Influence Loan Contract Terms?

We examine the impact of bank monitoring on loan contract terms using a new proxy for monitoring ability based on the labor input into monitoring. We show in out-of-sample tests that the proxy is a statistically and economically significant determinant of future loan quality. Accounting for clustering of observations by lead bank, and controlling for borrower characteristics, contract features and bank risk, we find a statistically significant direct relationship between monitoring ability and loan maturity and a statistically and economically significant direct relationship between monitoring ability and the loan yield spread. The relationships are particularly strong for working capital loans. The views and opinions expressed in this paper are those of the authors and do not necessarily reflect those of the Australian Prudential Regulation Authority.     

Bank Consolidation, Internationalization, and Conglomeration: Trends and Implications for Financial Risk

This paper documents trends in bank activity, consolidation, internationalization, and financial firm conglomeration with data on more than 100 countries, and explores the extent to which financial firm risk and systemic risk potential in banking are related to consolidation and conglomeration. The relationship between consolidation, conglomeration and financial risk is documented using financial data on the largest 500 financial firms worldwide and on large banks in about 90 countries. We find that (a) large conglomerate firms did not exhibit levels of risk‐taking lower than smaller and specialized firms in 1995, while they exhibited higher levels of risk‐taking in 2000; (b) highly concentrated banking systems exhibited levels of systemic risk potential higher than less concentrated systems during the 1993–2000 period, and this relationship has strengthened during the 1997–2000 period. We outline research directions aimed at explaining why bank consolidation and conglomeration may not necessarily yield either safer financial firms or more resilient banking systems.     

Non-price strategic behavior: the case of bank branches

We perform an empirical study of banks’ branching decisions as a strategic non-price variable in an oligopolistic setting. Using panel data of banks from Norway, we find clear evidence that banks act strategically in their branching decisions, taking into consideration the future response from rival banks. The analysis is applied to a unique data set which covers the entire banking sector during both pre- and post-banking crisis periods, where very different types of conduct are found in each of these periods both for banks and borrowers. Moreover, we find that a bank specific branch-network does not confer externality on other banks. As a result branch network affects only market shares but not market size.     

Central Bank independence: Low inflation at no cost? A numerical simulations exercise

The independent nature of the Central Bank is often associated with achieving low and stable inflation. Further to that the merits of independence are stretched to achieving low(er) output variability when compared to a government run monetary policy. In this paper we use the Alesina (1989) and Alesina and Gatti (1995) model to examine how often an Independent Central Bank can achieve an improvement on both counts. To do that we run numerical simulations where we change the ex ante probability of elections (and hence the degree of electoral uncertainty) with a view to determining how the private sector’s perceptions affect the level of output variability. Our conclusions agree with the Alesina and Gatti assertion that there will exist occasions when all political parties will be better off by consenting to the running of monetary policy by an independent institution but more often than not this comes at some cost to output. On theoretical grounds therefore, the trade-off between inflation and output variability (à la Rogoff) is still a valid one.     

Bashing and supporting central banks: the Bundesbank and the European Central Bank

In this paper, we analyse the influences leading to external pressure on or public support for German and European monetary policy. Based upon the findings for the Deutsche Bundesbank, lessons are drawn for the European Central Bank (ECB). We show that external pressure on the ECB stems mainly from politicians or from international organisations (such as the IMF). In contrast with evidence for the Bundesbank, interest groups (such as commercial banks) hardly attempt to influence European monetary policy. German data show that factors leading to external pressure on the central bank are rising unemployment and the threat that governments will lose their majority in the next election. Evidence for the latter is, however, weak, and we show that in any case this source of pressure is likely to be of minor importance for the ECB.     

房地产市场泡沫的金融支持以及演化风险分析

本文从房地产行业价格形成的交易模型入手,分别分析了没有金融支持和有金融支持的市场均衡过程,研究了金融支持对房地产市场泡沫形成的推动作用。进而探讨了房地产市场泡沫化带来的金融风险,并在此基础上提出了遏制房地产市场泡沫的政策建议。