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RBA Glossary definition for basis point

basis point – A basis point is 1/100th of 1 per cent or 0.01 per cent, so 100 basis points (bps) is equal to 1 percentage point. The term is used in money and securities markets to define differences in interest or yield. If an interest rate were to increase from 2 per cent to 3 per cent, it is said to have risen by 100 basis points (bps) or one percentage point.

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The Impact of Interest Rates on Bank Profitability: A Retrospective Assessment Using New Cross-country Bank-level Data

21 Jun 2023 RDP 2023-05
Callan Windsor, Terhi Jokipii and Matthieu Bussiere
However, we find a smaller effect than in previous studies: on average across countries, a 100 basis point fall in short-term interest rates results in a 5 basis point decline
https://www.rba.gov.au/publications/rdp/2023/2023-05.html

The Impact of Interest Rates on Bank Profitability: A Retrospective Assessment Using New Cross-country Bank-level Data

21 Jun 2023 RDP 2023-05
Callan Windsor, Terhi Jokipii and Matthieu Bussiere
NIMs by around 5 basis points in the short run (Table 3 top panel; Figure 5, top panel). ... Figure 5: Monetary Policy and Banks' NIMs. Impact of a 100 basis point cut to the policy rate.
https://www.rba.gov.au/publications/rdp/2023/2023-05/full.html

Conclusion

21 Jun 2023 RDP 2023-05
Callan Windsor, Terhi Jokipii and Matthieu Bussiere
The immediate effect of a 1 percentage point decrease in the short-term interest rate on NIMs is only 5 basis points. ... While this hides sizeable cross-country differences (and the long-run effect is closer to 15 basis points), the measured effect is
https://www.rba.gov.au/publications/rdp/2023/2023-05/conclusion.html

Empirical Findings across Countries

21 Jun 2023 RDP 2023-05
Callan Windsor, Terhi Jokipii and Matthieu Bussiere
NIMs by around 5 basis points in the short run (Table 3 top panel; Figure 5, top panel). ... Figure 5: Monetary Policy and Banks' NIMs. Impact of a 100 basis point cut to the policy rate.
https://www.rba.gov.au/publications/rdp/2023/2023-05/empirical-findings-across-countries.html

Non-technical summary for ‘The Impact of Interest Rates on Bank Profitability: A Retrospective Assessment Using New Cross-country…

21 Jun 2023 RDP 2023-05
Callan Windsor, Terhi Jokipii and Matthieu Bussiere
Overall, therefore, the evidence points to smaller effects of falling and low policy rates on bank profitability than previously estimated. ... Impacts of Monetary Policy. Impact of a 100 basis point cut to the policy rate.
https://www.rba.gov.au/publications/rdp/2023/2023-05/non-technical-summary.html