Artikel

Banks' Net Interest Margin and the Level of Interest Rates

to related objects

The prevailing view in the literature is that, in the long run, an increase in the level of interest rates will impact positively on banks' net interest margins. Using a time series of more than 40 years for the German banking system, we confirm this effect (the net interest margin increases by 7 basis points for every 100 basis point increase in the interest rate level). What is more, we show that the opposite effect exists in the short run. In addition, we analyze the consequences of the low-interest-rate environment and find that banks' interest margins on retail deposits, especially term deposits, have declined by up to 97 basis points.

Language: Englisch

Bibliographic citation: Journal: Credit and Capital Markets – Kredit und Kapital ; ISSN: 2199-1235 ; Volume: 50 ; Year: 2017 ; Issue: 3 ; Pages: 363-392

Classification: Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages

Subject: Net interest margin
level of interest rates

Event: Geistige Schöpfung

(who): Busch, Ramona
Memmel, Christoph

Event: Veröffentlichung

(who): Duncker & Humblot

(where): Berlin

(when): 2017

DOI: doi:10.3790/ccm.50.3.363

Last update: 10.03.2025, 11:43 AM CET

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Object type

Artikel

Associated

Busch, Ramona
Memmel, Christoph
Duncker & Humblot

Time of origin

2017

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