EconPapers    
Economics at your fingertips  
 

Interest rates, the yield curve and bank profitability in an emerging market economy

Resul Aydemir and Gokhan Ovenc

Economic Systems, 2016, vol. 40, issue 4, 670-682

Abstract: We investigate how the level of the short-term interest rate and the slope of the yield curve affect bank profitability in an emerging market economy using a dynamic panel model for the period 2002–2014. The estimation results suggest that while the short-term interest rate and the slope of the yield curve have a negative and significant impact on profits in the short run, the effects of these variables turn out to be positive in the long run, as expected. Hence, our findings indicate that monetary policy significantly influences bank profits in Turkey. The results also emphasize that bank profits in an emerging market exhibit much more sensitivity to interest rates than bank profits in an advanced economy such as the UK.

Keywords: Interest rates; Yield curve; Bank profitability; Net interest margin; Emerging market (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0939362516300814
Full text for ScienceDirect subscribers only

Related works:
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:ecosys:v:40:y:2016:i:4:p:670-682

Access Statistics for this article

Economic Systems is currently edited by R. Frensch

More articles in Economic Systems from Elsevier Contact information at EDIRC.
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-16
Handle: RePEc:eee:ecosys:v:40:y:2016:i:4:p:670-682