EconPapers    
Economics at your fingertips  
 

Regulations, Market Structure, Institutions, and the Cost of Financial Intermediation

Asli Demirguc-Kunt, Luc Laeven and Ross Levine ()

Journal of Money, Credit and Banking, 2004, vol. 36, issue 3, 593-622

Abstract: This paper examines the impact of bank regulations, market structure, and national institutions on bank net interest margins and overhead costs using data on over 1400 banks across 72 countries while controlling for bank-specific characteristics. The data indicate that tighter regulations on bank entry and bank activities boost the cost of financial intermediation. Inflation also exerts a robust, positive impact on bank margins and overhead costs. While concentration is positively associated with net interest margins, this relationship breaks down when controlling for regulatory impediments to competition and inflation. Furthermore, bank regulations become insignificant when controlling for national indicators of economic freedom or property rights protection, while these institutional indicators robustly explain cross-bank net interest margins and overhead expenditures. Thus, bank regulations cannot be viewed in isolation; they reflect broad, national approaches to private property and competition.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (295)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Regulations, market structure, institutions, and the cost of financial intermediation (2004)
Working Paper: Regulations, Market Structure, Institutions, and the Cost of Financial Intermediation (2003) Downloads
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:mcb:jmoncb:v:36:y:2004:i:3:p:593-622

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().

 
Page updated 2025-03-22
Handle: RePEc:mcb:jmoncb:v:36:y:2004:i:3:p:593-622