Weak instruments in estimating business cycle effects on banks' interest income

摘要

This article explores the link between the real business cycle and core bank earnings. Using bank-level data and an estimation technique which corrects for weak instruments, evidence confirms that pre-provision Net Interest Income (NII) is determined by the term structure of interest rates rather than output fluctuations. Output growth is only found to be significant when Loan-Loss Provisions (LLP) are taken into account.View full textDownload full textKeywordsnet interest income, system-GMM, weak instruments, business cycleJEL ClassificationC33, E32, G21Related var addthis_config = { ui_cobrand: "Taylor & Francis Online", services_compact: "citeulike,netvibes,twitter,technorati,delicious,linkedin,facebook,stumbleupon,digg,google,more", pubid: "ra-4dff56cd6bb1830b" }; Add to shortlist Link Permalink http://dx.doi.org/10.1080/13504851.2011.631884