Tobias Schlueter (corresponding author), University of Cologne, Department of Banking, Albertus Magnus Platz, 50923 Cologne, Germany, e-mail: tobias., tel.: +49 171 54 90 454; fax: +49 221 470 2305.
Ramona Busch, Deutsche Bundesbank, Financial Stability Department, Wilhelm-Epstein-Straße 14, 60431 Frankfurt am Main.
Soenke Sievers, University of Paderborn, Department of International Accounting, Warburger Str. 100, 33098 Paderborn.
Thomas Hartmann-Wendels, University of Cologne, Department of Banking, Albertus Magnus Platz, 50923 Cologne, Germany.
What drives the short‐term fluctuations of banks' exposure to interest rate risk?
Review of Financial Economics, Vol. 38 (2020), Iss. 4 P.674https://doi.org/10.1002/rfe.1100 [Citations: 2]
Why Are Interest Rates on Bank Deposits so Low?Busch, Ramona | Memmel, Christoph
Credit and Capital Markets – Kredit und Kapital, Vol. 54 (2021), Iss. 4 P.641https://doi.org/10.3790/ccm.54.4.641 [Citations: 0]
This study examines the loan-pricing behavior of German banks for a large variety of retail and corporate loan products. We find that a bank"s operational efficiency is priced in bank loan rates and alters interest-setting behavior. Specifically, we establish that a higher degree of operational efficiency leads to lower loan markups, which makes prices more competitive and smoothes the setting of interest rates. By employing state-of-the-art stochastic frontier efficiency measures to capture a bank"s operational efficiency, we take a look at the bank customers" perspective and demonstrate the extent to which borrowers benefit from cost-efficient banking.
Table of Contents
|Tobias Schlueter et al.: Loan Pricing: Do Borrowers Benefitfrom Cost-Efficient Banking?||1|