Social and Behavioral Sciences Commons^™

Determinants Of Commercial Bank Interest Rate Spread In A Liberalized Financial System: Empirical Evidence From Nigeria (1989-2000), C.I. Enendu

Economic and Financial Review

This paper provided empirical evidence on the determinants of interest rate spread in a liberalized financial system for the period 1989-2000, using selected banks in Nigeria. Ex-ante interest rate spread equations were estimated using bank balance sheet and income statement as well as macroeconomic data. The results showed that macroeconomic and monetary policy/financial regulation factors were more important determinants of commercial banks' interest spread than bank level factors, Inflation rate, GDP, .financial deepening, cash reserve requirement, risk premium, treasure bill rate, loan asset quality, liquidity risk and non interest expenses were the most important.factors that affected commercial banks' interest rate …