Bahamas, The | Risk premium on lending (lending rate minus treasury bill rate, %)

Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability. Development relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy. Limitations and exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm. Statistical concept and methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.
Publisher
The World Bank
Origin
Commonwealth of The Bahamas
Records
63
Source
Bahamas, The | Risk premium on lending (lending rate minus treasury bill rate, %)
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976 4.185
1977 4.58
1978 6.01416667
1979 6.0525
1980 3.465
1981 2.11083333
1982 2.23833333
1983 1.89166667
1984 4.125
1985 4.43166667
1986 5.78416667
1987 6.60416667
1988 4.53833333
1989 3.7875
1990 3.14833333
1991 2.51
1992 2.75916667
1993 3.49833333
1994 4.99666667
1995 3.74083333
1996 2.29666667
1997 2.40166667
1998 2.9075
1999 4.40333333
2000 4.9675
2001 4.0575
2002 3.505
2003 4.22416667
2004 5.445
2005 5.40083333
2006 4.63166667
2007 2.83679167
2008 2.76614167
2009 2.8831
2010 3.22253333
2011 3.814175
2012 4.51429167
2013 4.45138333
2014 4.21661667
2015 4.07148333
2016 3.10894167
2017 2.42203333
2018 2.5575
2019 2.64456667
2020 2.45436667
2021 1.66646667
2022 1.3875

Bahamas, The | Risk premium on lending (lending rate minus treasury bill rate, %)

Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the "risk free" treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability. Development relevance: Both banking and financial systems enhance growth, the main factor in poverty reduction. At low levels of economic development commercial banks tend to dominate the financial system, while at higher levels domestic stock markets tend to become more active and efficient. The size and mobility of international capital flows make it increasingly important to monitor the strength of financial systems. Robust financial systems can increase economic activity and welfare, but instability can disrupt financial activity and impose widespread costs on the economy. Limitations and exceptions: Countries use a variety of reporting formats, sample designs, interest compounding formulas, averaging methods, and data presentations for indices and other data series on interest rates. The IMF's Monetary and Financial Statistics Manual does not provide guidelines beyond the general recommendation that such data should reflect market prices and effective (rather than nominal) interest rates and should be representative of the financial assets and markets to be covered. For more information, please see http://www.imf.org/external/pubs/ft/mfs/manual/index.htm. Statistical concept and methodology: The risk premium on lending is the spread between the lending rate to the private sector and the "risk-free" government rate. Spreads are expressed as an annual average. A small spread indicates that the market considers its best corporate customers to be low risk; a negative value indicates that the market considers its best corporate clients to be lower risk than the government.
Publisher
The World Bank
Origin
Commonwealth of The Bahamas
Records
63
Source