The impact of economic policy uncertainty on banks' non-interest income activities

Whelsy Boungou and Charles Mawusi

International Economics, 2022, vol. 169, issue C, 89-97

Abstract: This paper investigates how banks adjust their business model amid rising global economic uncertainty. Specifically, we analyze the effect of economic policy uncertainty (EPU) on banks' non-interest income activities, using a large panel dataset of 3913 banks operating in 9 countries over the period 2009–2018. We find no statistically significant effect of EPU on banks’ net non-interest income (NNII). Further analysis shows that the lack of impact on NNII is due to a reduction in gross non-interest income which was offset by a decrease in gross non-interest expenses. Our results also suggest that the likelihood of banks to diversify income amid high EPU is conditional on the negative interest rate environment.

Keywords: Economic policy uncertainty; Bank diversification; Negative interest rate environment (search for similar items in EconPapers)
JEL-codes: D81 E65 G21 G28 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S211070172100086X
Full text for ScienceDirect subscribers only

Related works:
Journal Article: The impact of economic policy uncertainty on banks' non-interest income activities (2022)
Working Paper: The impact of economic policy uncertainty on banks' non-interest income activities (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:169:y:2022:i:c:p:89-97

DOI: 10.1016/j.inteco.2021.12.003

Access Statistics for this article

International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga

More articles in International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().