Determinants Of The Ex-Post Bank Spread In The Brazilian Market
Keywords:
Spread Bancário, Bancos, Lucratividade Bancária, Instituições Financeiras, Brasil.Abstract
Bank profitability is usually considered a relevant factor to provide the reliability of the financial system, reducing the risks associated to events of bankruptcy in this sector. In Brazil, however, there has been a great deal of discussion concerning the amount of earnings of financial institutions operating in the country, centered on the argument that such earnings are too large, becoming an excessive burden to the wealth-producing sector. For this reason, several studies have evaluated the structure, the evolution, and the determinants of banking spread, which is taken as the main variable responsible for the supposedly abnormal earnings. From the methodological viewpoint, these studies have concentrated in investigating the ex-ante banking spread related to operations with free resources and they have utilized macroeconomic factors as independent variables. The present study aims at identifying variables determining the ex-post banking spread, privileging explanatory variables intrinsic to the institutions, in other words, microeconomic. The extant literature on determinants of banking ex-post spread in Brazil presents a single previous paper, which presents poor results due to a problem of micronumerosity. To avoid such problem, our study utilizes data of balance sheets of banking institutions with operating credit portfolios from January 2000 to October 2009. Using a dynamic panel-data regression model, we test nine hypotheses and we find that the level of ex-post banking spread has relationships which are significant and: (i) positive with the credit portfolio risk; (ii) negative with the relative participation of the institutions in the credit market. On the other hand, we could not find statistically significant relationships between the level of ex-post banking spread and: the level of coverage of administrative expenses by revenues from services rendered; the origin of the institutions’ controlling capital, i.e. national versus foreign and state-owned versus private; the economy’s basic interest rate; the volatility of the Sao Paulo Stock Exchange stock index.
Downloads
Downloads
Additional Files
Published
Issue
Section
License
Once the papers have been approved, the authors will assign their copyrights to this Journal. The Copyright Assignment Conditions include:
1. The Mackenzie Administration Journal holds the rights to all the papers published therein through assignment of copyright.
2. The author retains moral rights to the paper, including the right to identify the author whenever the article is published.
3. As of July 1, 2015 RAM adopted the CC-BY license standard (Creative Commons– BY). Authors are allowed to copy, distribute, display, transmit and adapt articles. Authors must attribute to RAM explicitly and clearly an article’s original publication (with reference to the journal’s name, edition, year and pages in which the article was originally published), yet without suggesting that RAM endorses the author or its use of the article. Contents are released by means of the CC-BY license to fully inter-operate with a variety of different systems and services, including for commercial purposes. In case of an article’s reuse or distribution, authors must make the article’s licensing terms clear to third parties. CC-BY criteria follow open access policies by major OA (Open Access) publishers and journals, such as PLoS, eLife, Biomed Central and Hindawi, among others.
4. When formally requested by the author, this Journal may allow the paper to be published as a chapter or part of a book. The only requirement is that prior publication in this Journal (Journal name, issue, year and pages) must be clearly and explicitly shown as a reference.
