The determinants of net interest income in the Mexican banking system: an integrated model

Maudos, Joaquin and Solisa, Liliana (2009): The determinants of net interest income in the Mexican banking system: an integrated model. Forthcoming in: Journal of Banking and Finance

Abstract

This paper analyzes net interest income in the Mexican banking system over the period 1993-2005. Taking as reference the seminal work by Ho and Saunders (1981) and subsequent extensions by other authors, our study models the net interest margin simultaneously including operating costs and diversification and specialization as determinants of the margin. The results referring to the Mexican case show that its high margins can be explained mainly by average operating costs and by market power. Although non-interest income has increased in recent years, its economic impact is low

• Item Type: MPRA Paper
• Language: English
• Keywords: banking; net interest income; operating cost; non-interest income
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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