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Determinants of the Rate of Return on Commercial Bank Assets, 1933-1998

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  • Cebula, Richard

Abstract

This empirical study seeks to identify, for the period 1933-1998, determinants of the rate of return on bank assets (ROA). The study finds that the ROA has been an increasing function of the interest rate yield on bank loans to the private sector, the growth rate of real GDP, and the percentage of deposits covered by federal deposit insurance. In addition, the ROA appears to have benefited from the implementation of provisions in the Federal Deposit Insurance Corporation Improvement Act of 1991. Finally, increased financial services industry competition has reduced the ROA.

Suggested Citation

  • Cebula, Richard, 1999. "Determinants of the Rate of Return on Commercial Bank Assets, 1933-1998," MPRA Paper 61414, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61414
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    File URL: https://mpra.ub.uni-muenchen.de/61414/1/MPRA_paper_61414.pdf
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    References listed on IDEAS

    as
    1. Cebula, Richard, 1993. "The Regional Distribution of Bank Closings in the United States: An Extension of the Amos Analysis," MPRA Paper 51488, University Library of Munich, Germany.
    2. Kane, Edward J, 1989. "The High Cost of Incompletely Funding the FSLIC Shortage of Explicit Capital," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 31-47, Fall.
    3. James R. Barth, 1991. "The Great Savings and Loan Debacle," Books, American Enterprise Institute, number 918256, September.
    4. Ira Saltz, 1997. "FDIC Coverage on bank failures: Cointegration analysis using annual data, 1942–91," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(1), pages 71-80, February.
    5. Richard Cebula & Michael Toma, 2006. "Determinants of Geographic Differentials in the Voter Participation Rate," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(1), pages 33-40, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    rate of return; commercial bank performance; deposit insurance; interest rate charges;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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