Title: The determinants of interest margins and their effect on bank diversification: Evidence from Asian banks
Authors: Lin, Jane-Raung
Chung, Huimin
Hsieh, Ming-Hsiang
Wu, Soushan
資訊管理與財務金融系 註:原資管所+財金所
Department of Information Management and Finance
Keywords: Bank diversification;Interest margins;Endogenous switching model
Issue Date: 1-Apr-2012
Abstract: An endogenous switching regression model is employed for this study, categorizing the banks into regimes of high and low degrees of diversification, with our results indicating that net interest margins can be less sensitive to fluctuations in bank risk factors for functionally diversified banks as compared to more specialized banks. In turn, this implies that by diversifying their income sources, these banks can reduce the shocks to net interest margins arising from idiosyncratic risk. Our results show that prior findings can hold when the banks are located in a regime with a low degree of diversification. (C) 2011 Elsevier B.V. All rights reserved.
URI: http://hdl.handle.net/11536/16220
ISSN: 1572-3089
Journal: JOURNAL OF FINANCIAL STABILITY
Volume: 8
Issue: 2
End Page: 96
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