What is the value of bank output?

Alon, Titan; Fernald, John G.; Inklaar, Robert; Wang, J. Christina

Journal Article

What is the value of bank output?

Abstract: Financial institutions often do not charge explicit fees for the services they provide, but are instead compensated by the spread between interest rates on loans and deposits. The lack of explicit fees in lending makes it difficult to measure the output of banks and other financial institutions. Effective measurement should distinguish between income derived from lending services and income derived from portfolio decisions about risk and duration, and should be consistent among bank and nonbank financial institutions.

Keywords: Bank loans; Banks and banking; Interest rates;