What Determines the Interest Margin? An Analysis of the German Banking System
Alexander Karmann () and
Marco Pedrotti ()
Additional contact information
Alexander Karmann: Technische Universität Dresden, Faculty of Business and Economics, Chair for Economics, esp. Monetary Economics, D-01062 Dresden
Credit and Capital Markets, 2013, vol. 46, issue 4, 467-494
This paper analyzes the determinants of the interest margin of German banks over the period 1995–2007, explicitly addressing differences among different bank groups. We use three empirical models to focus on the following aspects: the time evolution of the interest margin, the average differences across groups, and the presence of autoregressive effects. For each model our results show that the interest margin can be mainly explained by market power and inefficiency, the influence of which is particularly high for cooperative banks. The Winner’s Curse phenomenon and the cross-subsidization strategy negatively influence the margin of private banks.
Keywords: German banks; Interest margin; Market power; Winner’s Curse; Germany (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Working Paper: What determines the interest margin? An analysis of the German banking system (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kuk:journl:v:46:y:2013:i:4:p:467-494
Access Statistics for this article
More articles in Credit and Capital Markets from Credit and Capital Markets
Bibliographic data for series maintained by Credit and Capital Markets ().