Financial intermediation costs in low-income countries : the role of regulatory, institutional, and macroeconomic factors

Tigran Poghosyan

We analyze factors driving persistently higher financial intermediation costs in low-income countries (LICs) relative to emerging market (EMs) country comparators. Using the net interest margin as a proxy for financial intermediation costs at the bank level, we find that within LICs a substantial part of the variation in interest margins can be explained by bank-specific factors: margins tend to increase with higher riskiness of credit portfolio, lower bank capitalization, and smaller bank size. Overall, we find that concentrated market structures and lack of competition in LICs banking system

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Year of publication:	2012
Authors:	Poghosyan, Tigran
Publisher:	Washington, DC : Internat. Monetary Fund
Subject:	Finanzintermediation \| Financial intermediation \| Zinsspanne \| Interest margin \| Entwicklungsländer \| Developing countries \| Schwellenländer \| Emerging economies

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Extent:	Online-Ressource (PDF-Datei: 34 S., 948 KB) graph. Darst.
Series:	IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. 12/140 IMF Working Papers
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	"Fiscal Affairs Department and Strategy, Policy, and Review Department "May 2012 Includes bibliographical references Systemvoraussetzungen: Acrobat Reader Cover; Contents; I. Introduction; II. Interest Margin Decomposition; A. Conceptual Framework; B. Decomposition Results; III. Econometric Analysis of Bank- and Country-Specific Determinants of Interest Margins; A. Model Specification; B. Variables; C. Descriptive Statistics; D. Results; IV. Robustness Checks; V. Conclusions; References; Figures; 1. Comparison of Implicit Net Interest Margins in LICs and EMs; 2. Percentile Distribution of Net Interest Margin Determinants in LICs and EMs; 3. Median Interest Margins in LICs and EMs by Countries; Tables; 1. Variable Definition and Sources 2. Descriptive Statistics3. Correlations Matrix; 4. Estimation Results Controlling for Bank-Specific Determinants; 5. Estimation Results Controlling for Macroeconomic Variables; 6. Estimation Results Controlling for Institutional Variables; 7. Estimation Results Controlling for Regulatory Variables; 8. Robustness Check for LICs: Using Market Share Instead of Market Concentration; 9. Robustness Check for LICs: Using Loan Market Concentration; 10. Robustness Check for LICs: Using Deposit Market Concentration 11. Robustness Check for LICs: Using Interaction of Market Concentration with Regional Dummies12. Robustness Check for LICs: Using Annual Average Variables Electronic reproduction; Available via World Wide Web
ISBN:	978-1-4755-0393-7 ; 978-1-4755-0393-7
Source:	ECONIS - Online Catalogue of the ZBW

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