The Determinants of Bank Interest Rate Margins in the Colombian Housing Credit Market

Juan David Durán-Vanegas

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses the determinants of banking mortgage loan interest rate margins in the Colombian mortgage credit market focusing on the effects of market concentration and using a panel-econometric approach for the period Jan-2003 to Dic-2014. Results imply that interest rate margins are mainly explained by the volatility of long-run interest market rates and negatively associated to the level of market concentration. These findings are consistent with a modified version of the efficient-structure hypothesis which suggests that differences in efficiency create unequal market shares and allow firms to set lower prices. Further evidence is presented by the existence of a long-term relationship between mortgage interest rates and market concentration during the sample period.

Keywords: Interest rate marings; Market structure; Housing finance (search for similar items in EconPapers)
JEL-codes: C23 G21 (search for similar items in EconPapers)
Date: 2016-06-09
New Economics Papers: this item is included in nep-ban and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:86376

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