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Bank Efficiency, Ownership, And Market Structure : Why Are Interest Spreads So High In Uganda ? / Beck, Thorsten
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Beck, Thorsten
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Bank Policy.
- Bank Spreads.
- Banking System.
- Banks and Banking Reform.
- Bond.
- Debt Markets.
- Developing Countries.
- Emerging Markets.
- Exchange.
- Finance and Financial Sector Development.
- Financial Literacy.
- Foreign Bank.
- Foreign Bank Entry.
- Foreign Banks.
- Interest.
- Interest Rate.
- Interest Rate Spread.
- Interest Rate Spreads.
- Lending.
- Loan.
- Loan Portfolio.
- Macroeconomic Variables.
- Market.
- Market Structure.
- Private Sector Development.
- Revenue.
- Local Subjects:
- Bank Policy.
- Bank Spreads.
- Banking System.
- Banks and Banking Reform.
- Bond.
- Debt Markets.
- Developing Countries.
- Emerging Markets.
- Exchange.
- Finance and Financial Sector Development.
- Financial Literacy.
- Foreign Bank.
- Foreign Bank Entry.
- Foreign Banks.
- Interest.
- Interest Rate.
- Interest Rate Spread.
- Interest Rate Spreads.
- Lending.
- Loan.
- Loan Portfolio.
- Macroeconomic Variables.
- Market.
- Market Structure.
- Private Sector Development.
- Revenue.
- Physical Description:
- 1 online resource (39 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2006
- System Details:
- data file
- Summary:
- Using a unique bank-level data set on the Ugandan banking system during 1999-2005, the authors explore the factors behind consistently high interest rate spreads and margins. While foreign banks charge lower interest rate spreads, they do not find a robust and economically significant relationship between privatization, foreign bank entry, market structure, and banking efficiency. Similarly, macroeconomic variables can explain little of the over-time variation in bank spreads. Bank-level characteristics, on the other hand, such as bank size, operating costs, and composition of loan portfolio explain a large proportion of cross-bank, cross-time variation in spreads and margins. However, time-invariant bank-level fixed effects explain the largest part of bank variation in spreads and margins. Further, the authors find tentative evidence that banks targeting the low end of the market incur higher costs and therefore higher margins.
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