TY - JOUR
T1 - Determinants of interest rate spreads of conventional banks listed on the Indonesia Stock Exchange
AU - Wijaya, Chandra
AU - Lucianna, Yunika
AU - Indriati, Fibria
N1 - Funding Information:
The authors thank the Research Cluster of Governance and Competitiveness, Faculty of Administrative Sciences, Universitas Indonesia, for providing financial assistance and supporting materials related to discussion, and assistance in writing this paper.
Publisher Copyright:
© Chandra Wijaya, Yunika Lucianna, Fibria Indriati, 2020.
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020/12/9
Y1 - 2020/12/9
N2 - The purpose of this study is to examine the variables that determine the interest rate spreads (IRS) of conventional banks listed on the Indonesia Stock Exchange (IDX). There are four major variables that affect a bank’s interest rate spreads, namely financial bank, macroeconomics, economic freedom and market structure variables. The study participants are conventional banks listed on the Indonesia Stock Exchange from 2013 to 2017. Data was tested by using the OLS regression model. The results of this study show that all of the financial bank variables (Liquidity Risk (LR), Return to Asset Ratio (RTAR), Capital Adequacy (CA), Cost Efficiency Ratio (CER), and Risk Aversion (RA)) can significantly affect interest rate spreads. While of the macroeconomic variables, only two can significantly affect interest rate spreads, namely Gross Domestic Product (GDP) and Inflation Rate (IR). Furthermore, all of the variables of economic freedom and market structure can significantly determine interest rate spreads.
AB - The purpose of this study is to examine the variables that determine the interest rate spreads (IRS) of conventional banks listed on the Indonesia Stock Exchange (IDX). There are four major variables that affect a bank’s interest rate spreads, namely financial bank, macroeconomics, economic freedom and market structure variables. The study participants are conventional banks listed on the Indonesia Stock Exchange from 2013 to 2017. Data was tested by using the OLS regression model. The results of this study show that all of the financial bank variables (Liquidity Risk (LR), Return to Asset Ratio (RTAR), Capital Adequacy (CA), Cost Efficiency Ratio (CER), and Risk Aversion (RA)) can significantly affect interest rate spreads. While of the macroeconomic variables, only two can significantly affect interest rate spreads, namely Gross Domestic Product (GDP) and Inflation Rate (IR). Furthermore, all of the variables of economic freedom and market structure can significantly determine interest rate spreads.
KW - Economic freedom
KW - Financial bank variables
KW - Interest rate spreads
KW - Macroeconomic variables
KW - Market structure variables
UR - http://www.scopus.com/inward/record.url?scp=85097889412&partnerID=8YFLogxK
U2 - 10.21511/bbs.15(4).2020.06
DO - 10.21511/bbs.15(4).2020.06
M3 - Article
AN - SCOPUS:85097889412
SN - 1816-7403
VL - 15
SP - 69
EP - 79
JO - Banks and Bank Systems
JF - Banks and Bank Systems
IS - 4
ER -