Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111920
Authors: 
Busch, Ramona
Memmel, Christoph
Year of Publication: 
2015
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 16/2015
Abstract: 
An increase in the level of interest rates is said to have a negative impact on banks' net interest margins in the short run. Using a time series of more than 40 years for the German banking system, we show that the opposite effect exists in the long run, where an increase in the level of interest rates by 100 basis points leads to an estimated increase of 7 basis points in the banks' net interest margin. In addition, we analyze the consequences of the low-interest rate environment and find that banks' interest margins for retail deposits, especially for term deposits, have declined by up to 97 basis points.
Subjects: 
net interest margin
level of interest rates
JEL: 
G21
ISBN: 
978-3-95729-158-5
Document Type: 
Working Paper

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