Can Good Governance Lower Financial Intermediation Costs?
Author | : Mariusz Jarmuzek |
Publisher | : International Monetary Fund |
Total Pages | : 43 |
Release | : 2018-12-11 |
ISBN-10 | : 9781484385678 |
ISBN-13 | : 1484385675 |
Rating | : 4/5 (78 Downloads) |
Download or read book Can Good Governance Lower Financial Intermediation Costs? written by Mariusz Jarmuzek and published by International Monetary Fund. This book was released on 2018-12-11 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper argues that better governance practices can reduce the costs, risks and uncertainty of financial intermediation. Our sample covers high-, middle- and low-income countries before and after the global financial crisis (GFC). We find that net interest margins of banks are lower if various governance indicators are better. More cross-border lending also appears conducive to lower intermediation costs, while the level of capital market development is not significant. The GFC seems not to have had a strong impact except via credit risk. Finally, we estimate the size of potential gains from improved governance.