IDEAS home Printed from https://ideas.repec.org/a/rza/ersawp/vy2021iid67.html
   My bibliography  Save this article

Estimates of bank-level funding costs in South Africa

Author

Listed:
  • Tim Olds
  • Daan Steenkamp

Abstract

We develop a new dataset of bank-level balance sheets data to estimate bank-level funding costs. These estimates are useful for monitoring of funding pressures and other risks to the banking sector as well as understanding the impact of prudential regulations and market conditions on the transmission of monetary policy. We show that bank funding cost spreads are materially higher now than before the Global Financial Crisis of 2008, in spite of lower interest rates. During the Covid-19 crisis, we show that aggregate funding costs have fallen in level (i.e. percentage) terms, but that funding costs have increased when expressed relative to reference rates. We show that the relative cost of raising deposits has increased, as deposit rates have not fallen by as much as the repurchase rate and other money market rates.

Suggested Citation

  • Tim Olds & Daan Steenkamp, 2021. "Estimates of bank-level funding costs in South Africa," ERSA Working Paper Series, Economic Research Southern Africa, vol. 0.
  • Handle: RePEc:rza:ersawp:v::y:2021:i::id:67
    as

    Download full text from publisher

    File URL: https://ersawps.org/index.php/working-paper-series/article/view/67/44
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    bank funding costs; composition of funding; financial market conditions;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rza:ersawp:v::y:2021:i::id:67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maggi Sigg (email available below). General contact details of provider: https://ersawps.org/index.php/working-paper-series/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.