The Impact of Market Interest Rates on Bank Performance Under Considering Bank-specific and Macroeconomic Factors

Abstract

This paper examines the relation between market interest rates and banks’ profitability by using America banking samples and tests whether the banks’ strategies are different from the past I investigate the impact of different market yield rates on banks’ performances via three aspects including revenue cost and net income The evidences show that market interest rate do have more impacts on the costs aspect than on the income aspect Furthermore the result also indicates that America banks have a tendency to “borrow short lend long” which would put themselves into a high liquidity risk However this risk can be weakened by asset liability management Finally the finding shows that America banks have better profitability either in the short run or long run when market interest rate goes down

Date of Award	2015 Jul 8
Original language	English
Supervisor	Hsuan-Chu Lin (Supervisor)