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Determinants of Banks' Net Interest Margins in Honduras, Koffie Ben Nassar, Edder Martinez, Anabel Pineda

Abstract
This paper analyzes the determinants of banks’ net interest margins in Honduras during 1998 to 2013—a period characterized by increasing banks’ net interest margins, foreign bank participation and consolidation. In line with findings in the previous literature, we find that operating costs are the most important drivers of banks’ net interest margins. We also find that competition among banks has led to higher concentration and that funding by parent banks positively impacts foreign banks’ net interest margins. Together, these results suggest that banks, particularly foreign banks, are under pressure to consolidate and reduce operating costs in order to offer competitive interest margins. We conclude that further structural reforms and consolidation may lower banks’ net interest margins
Table Of Contents
Cover; Determinants of Banks'' Net Interest Margins in Honduras; I. INTRODUCTION; II. LITERATURE REVIEW; III. BACKGROUND: INSTITUTIONAL STRUCTURE OF THE BANKING SECTOR; IV. METHODOLOGY AND DATA; A. A Basic Cost-Structure Empirical Model; B. Incorporating Risks; C. Other Considerations; D. Empirical Estimation; E. Data Overview; V. ESTIMATION RESULTS; VI. CONCLUSIONS AND POLICY IMPLICATIONS; References; ANNEX: Attachments
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (27 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781498331661

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