Net Interest Margin of Cooperative Banks in Low Interest Rate Environment
| Author(s): | Mgr. Matěj Kuc , PhDr. Karolína Vozková , |
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| Type: | Article in collection |
| Year: | 2018 |
| Number: | 0 |
| ISSN / ISBN: | |
| Published in: | Proceedings, 20th International Conference on Mathematics, Statistics and Financial Economics, Rome |
| Publishing place: | |
| Keywords: | cooperative banks, performance, negative interest rates, risk management |
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| Grants: | GACR 18-05244S - Innovative Approaches to Credit Risk Management GAUK No. 488317 - Performance of cooperative banking in the Czech Republic and other EU member states Performance of credit unions in the Czech Republic and other European countries |
| Abstract: | This paper deals with the impact of decrease in interest rates on the performance of commercial and cooperative banks in the Eurozone measured by net interest margin. The analysis was performed on balanced dataset of 268 commercial and 726 cooperative banks spanning the 2008 - 2015 period. We employed Fixed Effects estimation panel method. As expected, we found a negative relationship between market rates and net interest margin. Our results suggest that the impact of negative interest income differs across individual banking business models. More precisely, those cooperative banks were much more hit by the decrease of market interest rates which might be due to their ownership structure and more restrictive business regulation. |
