01918cas a2200265 a 4500 AALejournalIMF000681 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451853315 1018-5941 BD-DhAAL BD-DhAAL Barajas, Adolfo. Interest Spreads in Banking : Costs, Financial Taxation, Market Power, and Loan Quality in the Colombian Case 1974-96 / Adolfo Barajas, Natalia Salazar, Roberto Steiner. Washington, D.C. : International Monetary Fund, 1998. 1 online resource (46 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the determinants of the high intermediation spread observed in the Colombian banking sector for over two decades. A reduced-form equation is estimated on the basis of a bank profit maximization model that permits a decomposition into operational costs, financial taxation, market power, and loan quality. Although the average spread did not change between the pre liberalization (1974-88) and post liberalization (1991-96) periods, its composition did, with market power being significantly reduced and the responsiveness to loan quality increased. Colombia's progress in reducing operational costs and financial taxation and improving loan quality, will determine whether it can narrow the spread. Mode of access: Internet Salazar, Natalia. Steiner, Roberto. IMF Working Papers; Working Paper ; No. 1998/110 Full text available on IMF http://elibrary.imf.org/view/journals/001/1998/110/001.1998.issue-110-en.xml IMF e-Library