Negative rates and bank profit and cost efficiency : evidence for Eurozone
Date
01/07/2024Metadata
Show full item recordAbstract
This paper studies the effect of Negative Interest Rates Policies (NIRP) on the performance of Eurozone Banks. To this end, we apply a stochastic frontier analysis (SFA) to a sample of 1446 banks from Eurozone countries for the time period 2010–2018 to explore how bank profit and cost efficiency are affected by NIRP. We find that NIRP has a positive effect on profit efficiency which is mainly attributed to banks’ efforts to counterbalance the squeezed interest margins by increasing their non interest income and we also demonstrate that smaller banks and banks facing higher competition are more incentivised to enhance their cost efficiency when they operate under NIRP.
Citation
Siameti , P , Chronopoulos , D & Dotsis , G 2024 , ' Negative rates and bank profit and cost efficiency : evidence for Eurozone ' , European Journal of Finance , vol. Latest Articles . https://doi.org/10.1080/1351847X.2024.2366367
Publication
European Journal of Finance
Status
Peer reviewed
ISSN
1351-847XType
Journal article
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