Publication at Faculty of Social Sciences |
2009
Abstract
We examine the determinants of the interest rate margins of Czech banks by employing a bank-level dataset at quarterly frequency in 2000-2006. Our main results are as follows.
We find that more efficient banks exhibit lower margins and there is no evidence that banks with lower margins compensate themselves with higher fees. Price stability contributes to lower margins.
Higher capital adequacy is associated with lower margins, contributing to banking stability. Overall, the results indicate that the determinants of the interest rate margins of Czech banks are largely similar to those reported in other studies for developed countries.