Purpose -The purpose of this paper is to study the link between, on one hand the interest margin of the bank, and the determinants of the interest margin on the other. The basic importance of bank interest margin or spread (BIS), arises from the fact that it presents an indicator of a bank's profitability as well as the cost of financial intermediation imposed on both its depositors and debtors. Design/methodology/approach -To test the relationship using multiple linear regressions with lagged variables (OLS -ordinary least squares). In addition using correlation analysis as well as bootstrapping model was necessary to overcome the issue of unknown statistical distribution of small data samples. Findings -The quantitative study reveals proposed positive and significant correlation between bank interest margins and proxies of interest-rate risk, negative correlation with risk averseness, positive but slightly lower correlation with credit risk variable, and finally, not so strong influence of foreign bank entry. Research limitations/implications -To be more reliable, models should include individual bankspecific data for cross-banks examination, an area worthy of further research. Social implications -Having implemented the methodology, the paper draws some policy recommendations. To make interest margin optimal, authorities should redesign existing system of deposit protection together with building institutional credit guarantees and thus enable relevant information to flow freely amongst participants, i.e. to establish official information sharing arrangements for bank industry. Originality/value -This is the first econometric study of the bank interest spread determinants for the Serbian banking industry.
Endeavours to secure status of exact science for economics led to the exclusion of social and historical component from economic analysis. It is a long term process which started within classical political economy, gradually diverging the postulate upon which economic science is based from economic reality. Above mentioned changes are result of the long-term process during which holistic, social and historical aspects had been gradually removing from economic analysis. In this paper we will analyze the role of marginalism in the extrusion of social and historical from economic analysis
The paper is an attempt to assess relative importance of selected motives for foreign banks entry into Serbian banking market, as well as the changes that followed it, above all in terms of level of competition. We used questionnaires structured according to the main findings that come out of existing theoretical and empirical research on motives for FDI in banking industry. In addition, the goal of this study is to reveal the links between paradigms and theories, which are up to explaining determinants and motives of FDI in banking and the other industries, find common features, peculiarities and use it to refine research methodology
This study aims to provide evidence on the drivers of institutional trust in transition economies. Trust in institutions is of critical importance for the consolidation of democracy, as well as for political and social stability. Bearing in mind the political developments during the transition, the fragile democracies of post-socialist countries have faced significant challenges in terms of declining institutional trust, leading to problems of legitimacy and government ineffectiveness. Therefore, the transition countries represent a fertile ground for testing the theories that explain the origins and dynamics of institutional trust. In this paper we explore the level of institutional trust in Serbia and test the alternative views on the determinants of trust in key institutions of cultural and institutional theories. The cultural perspective implies that the level of trust in institutions is dependent on citizens? long-standing and deep-seated cultural norms, while the institutional approach explains trust as the outcome of individual perceptions of institutional performance. In order to examine the cultural and institutional variables that explain trust in a set of public institutions in Serbia, we employ individual-level data from the Life in Transition Survey. The analysis is aimed at generating policy suggestions and measures that can raise institutional credibility.
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