Banking Spreads in Latin America

February 1, 2006

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Format: Chicago

Gaston Gelos. Banking Spreads in Latin America, (USA: International Monetary Fund, 2006) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Banking, Competition, Deposit rates, Emerging and frontier financial markets, Financial markets, Financial services, Legal support in revenue administration, Monetary policy, Reserve requirements, Revenue administration

Keywords: Balance-sheet information, Bank, Bank competition, Bank indices, Bank spread, Banking spreads, Case bank, Competition, Concentration ratio, Deposit rates, Emerging and frontier financial markets, Financial intermediation, Global, Interest margin, Interest rate, Latin America's banks' overhead, Legal support in revenue administration, Reserve requirements, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/044
Stock No:

WPIEA2006044
ISBN:

9781451863048
ISSN:

1018-5941

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