Inflation and Bank Profitability: G20 Countries Banks Panel Data Analysis

Abstract

In that research, by using panel data analysis the relationship between G20 countries banks profitabilities and G20 countries inflation rates was found for the period of 2013-2015. Fixed effect was used in the model. When panel data analysis was done for G20 countries, inflation was found to have negative impact on banks profitability. When micro analysis was done on panel data, it was observed that inflation had negative fixed effect on return on assets of developed countries banks and it was observed that inflation had positive fixed effect on return on assets of developing countries banks.