The Relationship Between Bank Concentration and Interest Rates

IF 1.7 Q3 BUSINESS, FINANCE

Journal of Central Banking Theory and Practice Pub Date : 2023-09-01 DOI:10.2478/jcbtp-2023-0023

Tijana Kaličanin, Z. Grubišić, Sandra Kamenković

{"title":"The Relationship Between Bank Concentration and Interest Rates","authors":"Tijana Kaličanin, Z. Grubišić, Sandra Kamenković","doi":"10.2478/jcbtp-2023-0023","DOIUrl":null,"url":null,"abstract":"Abstract The aim of this paper was to analyse the relationship between market concentration and market interest rate. Taking into thought the relationship between the level of concentration within a market and the level of competition, it can be deduced that an increment in concentration results in a decrease in competition. In order to test the above mentioned relationship, the authors used a panel dataset covering the period 2010Q1-2019Q4. The set includes quarterly data of all banks that operated in the Republic of Serbia. First of all, a correlation analysis was applied to determine whether there is a quantitative agreement between interest rates and concentration measures, and also a regression analysis i.e., econometric evaluation of panel regression models. In order to test the hypothesis, a total of 12 regression equations were applied. Results indicate that that the concentration indicators have a statistically significant and negative impact on the overall active interest rate in only two regression models, which is inadequate to support the hypothesis that there exists a systematic influence of concentration in the banking industry on interest rates. As a conclusion, the regression analysis imposes that the variations of the total loan interest rate can be explained to the greatest extent by the systematic and robust influences of the key policy rate of the NBS and the interannual inflation rate for the given quarter, as well as by the robust tendency of a linear decline over time.","PeriodicalId":44101,"journal":{"name":"Journal of Central Banking Theory and Practice","volume":null,"pages":null},"PeriodicalIF":1.7000,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Central Banking Theory and Practice","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2478/jcbtp-2023-0023","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

Abstract The aim of this paper was to analyse the relationship between market concentration and market interest rate. Taking into thought the relationship between the level of concentration within a market and the level of competition, it can be deduced that an increment in concentration results in a decrease in competition. In order to test the above mentioned relationship, the authors used a panel dataset covering the period 2010Q1-2019Q4. The set includes quarterly data of all banks that operated in the Republic of Serbia. First of all, a correlation analysis was applied to determine whether there is a quantitative agreement between interest rates and concentration measures, and also a regression analysis i.e., econometric evaluation of panel regression models. In order to test the hypothesis, a total of 12 regression equations were applied. Results indicate that that the concentration indicators have a statistically significant and negative impact on the overall active interest rate in only two regression models, which is inadequate to support the hypothesis that there exists a systematic influence of concentration in the banking industry on interest rates. As a conclusion, the regression analysis imposes that the variations of the total loan interest rate can be explained to the greatest extent by the systematic and robust influences of the key policy rate of the NBS and the interannual inflation rate for the given quarter, as well as by the robust tendency of a linear decline over time.

查看原文本刊更多论文

银行集中度与利率的关系

摘要本文的目的是分析市场集中度与市场利率之间的关系。考虑到市场集中度与竞争水平之间的关系，可以推断出集中度的增加会导致竞争的减少。为了检验上述关系，作者使用了涵盖2010年第一季度至2019年第四季度的面板数据集。该数据集包括在塞尔维亚共和国经营的所有银行的季度数据。首先，应用相关性分析来确定利率和集中度措施之间是否存在定量一致性，并进行回归分析，即对面板回归模型进行计量经济评价。为了检验假设，共使用了12个回归方程。结果表明，仅在两个回归模型中，集中度指标对整体活跃利率存在显著的负向影响，不足以支持银行业集中度对利率存在系统性影响的假设。综上所述，回归分析表明，总贷款利率的变化在很大程度上可以通过国家统计局关键政策利率和给定季度的年际通胀率的系统和强大影响来解释，以及随着时间的推移线性下降的强大趋势。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Journal of Central Banking Theory and Practice BUSINESS, FINANCE-

CiteScore

2.80

自引率

57.10%

发文量

审稿时长

7 weeks

期刊介绍： Journal of Central Banking Theory and Practice is a scientific journal dedicated to publishing quality papers and disseminating original, relevant and applicable economic research. Scientific and professional papers that are published in the Journal of Central Banking Theory and Practice cover theoretical and practical aspects of central banking, monetary policy, including the supervision issues, as well as banking and management in central banks. The purpose of the journal is to educate the general public about the key issues that the central bankers globally face, as well as about contemporary research and achievements in the field of central banking theory and practice.