Open Access. Powered by Scholars. Published by Universities.®
Finance and Financial Management Commons™
Open Access. Powered by Scholars. Published by Universities.®
- File Type
Articles 1 - 2 of 2
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 Chicken Or The Egg? The Trade-Off Between Bank Non Interest Income And Net Interest Margins, Barry Williams, Gulasekaran Rajaguru
The Chicken Or The Egg? The Trade-Off Between Bank Non Interest Income And Net Interest Margins, Barry Williams, Gulasekaran Rajaguru
Barry Williams
This study considers the time series relationship between bank non interest income and bank net interest margins in Australia using panel vector autoregressions. It is found that increases in bank non interest income are being used to supplement decreases in net interest margins, but that the magnitude of the increase in non interest income is smaller than the decrease in net interest margins. It is also found that increases in non interest income predate declines in margin income, suggesting that Australian banks were pro-active in the process of disintermediation. The agency risks of increased bank non interest income are explored …