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RBA Glossary definition for Net interest spread

Net interest spread – A measure of the difference between a bank�s average rate of interest-bearing assets and its average rate of interest-bearing liabilities.

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The Consequences of Low Interest Rates for the Australian Banking Sector

21 Dec 2022 RDP 2022-08
Anthony Brassil
Banks' net interest margins (NIMs) – the difference between their interest income and interest expenses (as a share of assets) – will fall with interest rates if spreads remain constant. ... So even if Australian banks' were able to maintain their
https://www.rba.gov.au/publications/rdp/2022/2022-08/full.html

Introduction

21 Dec 2022 RDP 2022-08
Anthony Brassil
Banks' net interest margins (NIMs) – the difference between their interest income and interest expenses (as a share of assets) – will fall with interest rates if spreads remain constant. ... The combination of stable spreads and a deposit lower bound
https://www.rba.gov.au/publications/rdp/2022/2022-08/introduction.html

Non-technical summary for ‘The Rise in Household Liquidity’

21 Dec 2022 RDP 2022-08
Anthony Brassil
For example, the international literature predicts that the difference between banks' lending rates and their costs of funding those loans (known as the net interest spread) will shrink as interest rates ... Conversely, I find that Australia's major
https://www.rba.gov.au/publications/rdp/2022/2022-08/non-technical-summary.html

The Literature through the Lens of Banks' Balance Sheets

21 Dec 2022 RDP 2022-08
Anthony Brassil
So even if Australian banks' were able to maintain their lending spreads while interest rates were falling, this spread compression in 2021 could be the beginning of the delayed effect predicted ... For banks with unhedged fixed-rate assets and
https://www.rba.gov.au/publications/rdp/2022/2022-08/the-literature-through-the-lens-of-banks-balance-sheets.html

Investigating the ‘Reversal Rate’ in Australia

21 Dec 2022 RDP 2022-08
Anthony Brassil
If this constraint binds (i.e. they cannot avoid it by raising external equity), reductions in the policy rate tighten the constraint by reducing banks' net interest income. ... Therefore, the accelerated credit growth that comes with interest rate
https://www.rba.gov.au/publications/rdp/2022/2022-08/investigating-the-reversal-rate-in-australia.html