What drives bank earnings? Evidence for 28 banking sectors

  title={What drives bank earnings? Evidence for 28 banking sectors},
  author={Laurence Pouw and J. I. Kakes},
  • Laurence Pouw, J. I. Kakes
  • Published 2013
  • Economics
  • The crisis has revived interest in the determinants of bank earnings. We investigate the relationship between profitability and balance sheet composition of 28 national banking sectors. Using Statistical Cost Accounting, we find a plausible pattern of individual assets’ and liabilities’ contributions to earnings and costs. Both wholesale and retail activities yield positive margins, while interbank lending and customer deposits are the most expensive funding sources. Wholesale finance has a… CONTINUE READING

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