scholarly journals The impact of interest rate spread on the banking system efficiency in South Africa

2018 ◽  
Vol 6 (1) ◽  
pp. 1546417
Author(s):  
Varaidzo batsirai Shayanewako ◽  
Asrat Tsegaye ◽  
Christian Nsiah
Keyword(s):  
South Africa ◽  
Interest Rate ◽  
Banking System ◽  
System Efficiency ◽  
Interest Rate Spread ◽  
The Impact

Financial Crisis, Globalisation and Development in Africa

2020 ◽  
Vol 56 (1) ◽  
pp. 89-104
Author(s):  
Simplice A. Asongu ◽  
Joseph Nnanna
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Banking System ◽  
System Efficiency ◽  
African Countries ◽  
Jel Codes ◽  
Crisis Period ◽  
Generalised Method Of Moments ◽  
The Impact ◽  
Financial Globalisation

This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004–2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent for financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. JEL Codes: F02, F21, F30, F40, O10

scholarly journals The Impact of Macroeconomic and Banking Factors on Credit Growth in the Albanian Banking System

2015 ◽  
Vol 2 (1) ◽  
pp. 113 ◽  
Author(s):  
Ali Shingjergji ◽  
Marsida Hyseni
Keyword(s):  
Interest Rate ◽  
Unemployment Rate ◽  
Inflation Rate ◽  
Banking System ◽  
Ordinary Least Squares ◽  
Capital Adequacy ◽  
Gdp Growth ◽  
Credit Growth ◽  
Capital Adequacy Ratio ◽  
The Impact

The aim of this paper is to analyze the influence of some macroeconomic and bankhttp://ejes.euser.org/issues/may-august-2015/Ali.pdfing factors on credit growth in the Albanian banking system. From the literature review is noticed that the credit growth in the banking system is influenced by both macroeconomic and banking factors. We use credit growth as a dependent variable while as independent variables we use: GDP growth, inflation rate, unemployment rate, loan interest rate, capital adequacy ratio, bank size and NPL ratio. The relationship between credit growth and macroeconomic and banking factors was tested by using a regression model like the ordinary least squares (OLS). We take into consideration a period from 2002 – 2013 using quarterly panel data for the whole Albanian banking system with a total of 48 observations per each variable. The regression results find out that the credit growth in the Albanian banking system is positively related to GDP growth, inflation rate and capital adequacy ratio while is negatively related to unemployment rate, interest rate, non performing loans and bank size.

scholarly journals The Impact of Financial Intermediation on the Economy of Ghana

2021 ◽  
Vol 04 (06) ◽  
Author(s):  
David Kwashie Garr ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Financial Intermediation ◽  
Operating Cost ◽  
Bank Deposits ◽  
Interest Rate Spread ◽  
The Impact ◽  
Adf Test ◽  
The Relationship ◽  
Positive Effect

This study investigated the impact of financial intermediation on economic performance using data from sixteen (16) universal banks in Ghana. This investigation is carried out using five popular indicators of financial sector intermediation, which are deposit mobilisation, customer credit, operating cost, reserve requirement and interest rate spread. Gross Domestic Product Per Capital (GDPPC) was used as a measure of economic sector growth or performance. The causal research design was used in this analysis. The unit root was estimated using the Augmented Dickey Fuller (ADF) test. The relationship between the dependent and independent variables was also determined using basic statistics tests and multiple regression analysis. The results reveal that bank deposits have an insignificant positive effect on the economy. Bank credit, however, has a negative significant effect on economic growth. The results also suggest that operating cost has a negative effect on the economic growth but the result is not significant. However, bank reserves have a positive significant effect. Finally, the results suggest that interest rate spread has a positive effect on the economy, but the relationship is not significant.

scholarly journals Interest Rate Deregulation, Bank Development And Economic Growth In South Africa: An Empirical Investigation

2010 ◽  
Vol 9 (11) ◽  
Author(s):  
Nicholas M Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Interest Rate ◽  
Causal Relationship ◽  
Financial Development ◽  
Positive Impact ◽  
Strong Support ◽  
Prima Facie ◽  
Financial Depth ◽  
The Impact

In this paper the dynamic relationship between interest rate reforms, bank-based financial development and economic growth is examined – using two models in a stepwise fashion. In the first model, the impact of interest rate reforms on financial development is examined using a financial deepening model. In the second model, the dynamic causal relationship between financial development and economic growth is examined, by including investment as an intermittent variable in the bi-variate setting, thereby creating a simple tri-variate causality model. Using cointegration and error-correction models, the study finds strong support for the positive impact of interest rate reforms on financial development in South Africa. However, contrary to the results from some previous studies, the study finds that financial development, which results from interest rate reforms, does not Granger cause investment and economic growth. In addition, the study finds a uni-directional causal flow from investment to financial development and prima-facie causal flow from investment to growth. The study, therefore, concludes that although interest rate reforms impact positively on financial depth in South Africa, the causal relationship between financial depth and economic growth tends to take a demand-following path. Moreover, given the causal flow from investment to financial development and a prima facie causal flow from investment to growth, it is likely that the economic development in South Africa is driven largely by the growth of the real sector rather than the financial sector.

scholarly journals Systemic Risk in the Interbank Market with Overlapping Portfolios

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-12 ◽  
Author(s):  
Shanshan Jiang ◽  
Hong Fan
Keyword(s):  
Interest Rate ◽  
Systemic Risk ◽  
Banking System ◽  
Bipartite Network ◽  
Investment Risk ◽  
Interbank Market ◽  
Operating Rules ◽  
Proposed Model ◽  
The Stability ◽  
The Impact

The increasing frequency and scope of the financial crisis have attracted more attention in the research of the systemic risk of banking system. A new model for the interbank market with overlapping portfolios is proposed to simulate a banking system in this work. The proposed model uses a bipartite network of banks and their assets to analyze the impact of bank investment on the stability of the banking system. In addition, this model introduces investment risk and allows banks to make up for liquidity by selling devaluated assets, which reflects the operating rules of the banking system more realistically. The results show that allowing banks to sell devaluated assets to make up for liquidity can improve the stability of the banking system and the interbank market can also improve the stability of the banking system. For the investment of banks, the investment risk is an uncertain factor that affects the stability of the banking system. The proposed model further analyzes the impact of average investment interest rate, savings interest rate, deposit reserve ratio, and investment asset diversity on the stability of the banking system. The model provides a tool for policy-makers and supervision agencies to prevent the systemic risk of banking system.

scholarly journals Monetary policy and bank lending in euro area since the outset of the global financial crisis

2020 ◽  
pp. 10-10
Author(s):  
Agata Wierzbowska
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Euro Area ◽  
Global Financial Crisis ◽  
Banking System ◽  
Bank Lending ◽  
Liquidity Provision ◽  
The Individual ◽  
The Global Financial Crisis ◽  
The Impact

In this article, we present the impact of the monetary policy stance of the European Central Bank(ECB)since 2007 on bank lending in the euro area and compare the effects of the main measures: interest rate changes, liquidity provision, and asset purchase programmes. We also analyse the channels through which monetary policy might influence the banking system and narrow our focus to the individual countries. The main results indicate stimulating impact of ECB?s policy stance on bank lending that extends its influence mainly through interest rate cuts further supported by the liquidity provision and asset purchase programmes. However, we also find considerable differences across the member states, of ten depending on the state of the banking system and loan demand in the member state. The results support the variety of monetary policy measures introduced by the ECB, as each played its own role in supporting the banking system and encouraging bank lending in the euro area.

scholarly journals Impact of Macroeconomic and Bank Specific Variables on Spread of Interest Rate: A Study of Listed Commercial Banks in Bangladesh

2020 ◽  
pp. 148-156
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Banking System ◽  
Money Market ◽  
High Interest Rate ◽  
High Interest ◽  
Income Sources ◽  
Interest Rate Spread ◽  
The Difference ◽  
Indirect Impacts

The Banking system of a country provides the lifeblood to the efficient and effective functioning of an economy. Therefore it is crucial to understand the lending and borrowing rates and hence the spread of interest rates in the banking and financial sector. The Spread of Interest rate is the difference between loan rates and the deposit rates of a bank. High-interest rate reflected in the spread of a high-interest rate will immensely disrupt and cause adverse consequences in the whole economy. Both the spread of interest rate and the interest margin show that the intermediation cost is higher in Bangladesh. High-interest margins in a banking system are indicative of deep-rooted symptoms of inefficiency, absence of competition, non-diversification of income sources, and skewed development of money and capital market in favor of banks’ lending and inflexibility of rate adjustments symmetrically in response to market changes. Moreover, a frequent financial scam in Bangladesh has added more troubles in the money market of Bangladesh. For example, Hallmark scam of almost 4000 crore taka of Sonali Bank, a financial scam of Abdul Mannan, CEO of BIFC, amounted to around 950 crore taka, around 4500 crore taka scam of Janata bank and Agrani bank have made our money market and financial market susceptible to failure. These events have some direct or indirect impacts on interest rates. Hence, I have felt the importance of identifying the determinants of the spread of interest rates. Understanding the determinants of the spread of interest rates would enable us to eliminate such unnecessary costs in financial intermediation, which would be the result in operational and administrative efficiency, resulting in financial viability, stability, and economic growth. Therefore, we need to know the determinants of the spread of interest rates. Hence, I have been motivated to study the determinants of interest rate spread and their extent of impacts on interest rate spread.

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