Banking Spreads in Latin America

By R. G. Gelos, Gaston Gelos, A.M. Corbacho, Charles Collyns, M. Nakane, David Owen, S. Phillips. Social Science Research Network, 2006

181 citations recorded by the source corpus.

Intermediation spreads in Latin America are high by international standards. This paper examines the determinants of bank interest margins in that region using bank and country-level data from 85 countries, including 14 Latin American economies. The results suggest that Latin America has higher interest rates, less efficient banks, and larger reserve requirements than other regions and that these factors have a significant impact on spreads. However, Latin American countries do not differ markedly from their peers in other aspects that are found important in determining the cost of financial intermediation, such as inflation and bank profit taxation.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/b60fa661e2df284cbf6105d4deedbe2827fbdab2

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Phil Molyneux
2. Tigran Poghosyan
3. Paolo Saona
4. J. Maudos
5. Ru Xie
6. Heiko Hesse
7. A. Reghezza
8. Laurent Weill

In Finance

1. Phil Molyneux
2. Paolo Saona
3. Tigran Poghosyan
4. Ru Xie
5. A. Reghezza
6. Heiko Hesse
7. Liliana Solisa
8. J. Maudos

Citations in the corpus

• The determinants of net interest income in the Mexican banking system: an integrated model (2009, methodology): “On the one hand, some studies show that margins are pro-cycle (Drakos, 2002; Claey and Vander Vennet, 2007), while in others the margin is counter-cycle (Martínez and Mody, 2004; Gelos, 2006; Carbó and Rodríguez, 2007; Claey and Vander Vennet, 2007). f) Inflation rate.”
• The Determinants of Commercial Bank Profitability in Sub-Saharan Africa (2009, background): “Gelos (2006) studies the determinants of bank interest margins in Latin America using bank and country level data.”
• Oil Prices and Bank Profitability: Evidence from Major Oil-Exporting Countries in the Middle East and North Africa (2009, background): “…Africa, Athanasoglu and others (2008) Greece, Athanasoglu and others (2006) South Eastern Europe, Demirguc-Kunt and Huizinga (1998) over 80 countries while Gelos (2006) examines Latin America, Angbazo (1997) and Berger and others (1987) the U.S. and Saunders and Schumacher (2000) the EU and U.S.”
• Intra- and extra-bank determinants of Latin American Banks' profitability (2016, methodology): “For instance, although they use samples for several countries, they study the banking profitability using bank-specific data only (Brock & Rojas Suárez, 2000) or their samples of firms suffer from lack of representativeness in order to carry out further extrapolation (Gelos, 2009).”
• Bank margins and profits in a world of negative rates (2019, methodology): “In-line with Gelos (2006) and Almarzoqi and Naceur (2015), we also use a depth of credit information index that measures rules affecting the scope, accessibility and quality of credit information available through public or private credit registries.”