earticle

영어

This research confirmed whether banks and saving banks increase their deposit margin under changes in the base rate. This paper has conclusions as follows. First, when the Bank of Korea changes the base rate, deposit rate variable are significant with panel analysis in the total data set and saving banks. This result implies that changes in the base rate affect deposit margin. Second, this study confirmed whether banks and saving banks maximize their deposit margin as base rate changes. As a result, when the Bank of Korea cut the base rate, the deposit margins of banks and saving banks decreased significantly. Still, their deposit margins are not statistically significant in the opposite situation. Therefore, this paper could not find evidence that banks and saving banks behave to maximize their deposit margin. Maybe, this phenomenon can appear because these financial institutions recognize this criticism.