A deeper analysis may be needed to determine the factors contributing to local commercial banks enjoying a high interest rate spread.
That’s the view of CEO of the Jamaica Money Market Brokers Merchant Bank, Jerome Smalling.
The spread refers to the difference in borrowing and lending rates of financial institutions.
Finance Minister Audley Shaw has been lamenting the high interest rate spread by local banks when compared with other financial institutions in the region. But Mr. Smalling says other types of comparisons are necessary.
He says more research may be needed.
However, Mr. Smalling agrees that more banks will benefit customers.
Meanwhile, Executive in charge of Business Development and Research at the Jamaica National Building Society, Dr. Dana Morris-Dixon says the 2015 World Bank Global data shows that Jamaica’s interest rate spread is just over 12 percent.
She says despite the reduction, the interest rate spread is still higher than other countries in the region.
Dr. Morris-Dixon says the approval of three new commercial banking licenses is necessary considering the dominance of the current players.
The Bank of Jamaica has approved commercial banking licenses for JMMB Merchant Bank and JN Building Society.