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Full-Text Articles in Finance and Financial Management
The Chicken Or The Egg? The Trade-Off Between Bank Fee Income And Net Interest Margins, Barry Williams, Gulasekaran Rajaguru
The Chicken Or The Egg? The Trade-Off Between Bank Fee Income And Net Interest Margins, Barry Williams, Gulasekaran Rajaguru
Barry Williams
This study considers the time series relationship between bank fee income and bank net interest margins in Australia, applying panel vector autoregressions to a unique, hand-collected dataset. Increases in bank fee income are being used to supplement decreases in net interest margins. The increase in magnitude of fee income associated with reductions in margin income is smaller than the decrease in net interest margins, resulting in a net wealth transfer favouring users of bank services; although not all users of bank services gained and/or gained equally. The overall increase in fee income is marginally greater that the reduction in margin …
The Impact Of Non Interest Income On Bank Risk In Australia, Barry Williams
The Impact Of Non Interest Income On Bank Risk In Australia, Barry Williams
Barry Williams
This paper considers the relationship between bank revenue composition and bank risk in Australia, using data drawn from Australian bank confidential regulatory returns. It is found that those banks with lower levels of non interest income and higher revenue concentration are less risky, contrary to mean-variance portfolio theory but consistent with previous international evidence. Decreasing returns to scale in bank risk is found, with results suggesting that the major Australian banks have reached the scale point where size is risk increasing. Non interest income is found to be risk increasing, but some evidence is found that trading and investment income …
What Determines Differences In Foreign Bank Efficiency? Australian Evidence, Jan-Egbert Sturm, Barry Williams
What Determines Differences In Foreign Bank Efficiency? Australian Evidence, Jan-Egbert Sturm, Barry Williams
Barry Williams
This study examines the factors that determine differences in efficiency of foreign banks in the host market (Australia). The impact of home market, host market and parent bank characteristics are considered within the frameworks offered by comparative advantage and new trade theories. Parametric distance functions are used to estimate the efficiency of foreign banks in Australia, and the robustness of model specification is tested using both general-to-specific modelling and extreme bounds analysis. It is found that following clients reduces the efficiency of profit creation. Incumbent bank's market share acts as a barrier to entry, while parent bank profits do not …