Përcaktuesit mikro- dhe makroekonomikë të marzhit neto të interesave në sistemin bankar shqiptar (2002-2014)[Micro- and macroeconomic determinants of net interest margin in the Albanian banking system (2002-2014)]

Including for the first time macroeconomic variables in the empirical analysis with panel data for commercial banks, this paper aims to shed light on the determinants of net interest margin in the Albanian banking sector. Considered as a good indicator of banking intermediation efficiency level, interest margin size helps to perceive asymmetries in the banking market and the costs transmitted to the clients. The issue is important in the context of monetary policy, since the higher are the asymmetries in the market, the more difficult the transmission of its signals. Using an OLS-based PCSE procedure to estimate the econometric model, this study suggests that bank specific factors such as overhead costs, capital adequacy ratio, current liquidity ratio and non-performing loans ratio are the most important determinants of interest margins in Albania. Macroeconomic factors such as growth, exchange rate and domestic debt have a significant impact, even though the main contribution is attributed to bank’s specific factors. The information about banking variables may have implications mainly in the banking supervision areas of market efficiency and regulation, but the new information about macroeconomic variables is of relevance to policymakers who, with their economic policies, can contribute to the stability of the banking market.