Determinants of Interest Rate Spreads in Solomon Islands

June 12, 2014

Preview Citation

Format: Chicago

Nooman Rebei. Determinants of Interest Rate Spreads in Solomon Islands, (USA: International Monetary Fund, 2014) accessed December 3, 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

Bank interest rate spreads in Solomon Islands are high by regional standards. This paper examines the determinants of bank interest rates including bank specific, banking sector, macroeconomic, and legal indicators. The results show that the scale of operation, overhead costs, concentration index, and some macroeconomic variables (i.e., monetary policy rates and real growth) significantly influence interest rate margins. The paper particularly focus on the influence of the banking sector structure and finds strong evidence of bank collusion.

Subject: Bank credit, Banking, Commercial banks, Financial institutions, Income, Inflation, Legal support in revenue administration, Loans, National accounts, Personal income, Prices, Revenue administration

Keywords: Asia and Pacific, Bank, Bank concentration, Bank cost, Bank risk aversion, Bank specific, Bank spread, Banking spreads, Banks in Solomon Islands, Commercial banks, Correlated bank reaction, Credit risk, Financial intermediation, Income, Inflation, Interest, Interest rate, Legal support in revenue administration, Loans, Market power, Rate, Risk-averse bank, Solomon Islands, WP

Publication Details

Pages:

24
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2014/105
Stock No:

WPIEA2014105
ISBN:

9781498303651
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers