Abstract
Using data for a large sample of banks from 31 OECD countries over 1995–2018, we analyze the impact of belonging to a banking group on banks’ net interest margins. Our results confirm a positive relationship between interest rates and interest margins, which is stronger in a low-interest rate environment. For banks that are foreign subsidiaries of a banking group, we find that interest margins are less sensitive to the local interest rate. Our results show that such foreign subsidiaries are also sensitive to the interest rate prevailing in the group's headquarters.
Original language | English |
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Article number | 106966 |
Number of pages | 16 |
Journal | Journal of Banking and Finance |
Volume | 154 |
Early online date | 20-Jul-2023 |
DOIs | |
Publication status | Published - Sept-2023 |
Keywords
- Bank profitability
- Banking groups
- Low interest rates
- Monetary policy transmission
- Net interest margin