Determinants of Interest Rate Spreads in Solomon Islands
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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.
Series:
Working Paper No. 2014/105
Subject:
Bank credit Banking Commercial banks Financial institutions Income Inflation Legal support in revenue administration Loans National accounts Personal income Prices Revenue administration
English
Publication Date:
June 12, 2014
ISBN/ISSN:
9781498303651/1018-5941
Stock No:
WPIEA2014105
Pages:
24
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