The determinants of bank margins revisited: a note on the effects of diversification Carbó Valverde, Santiago Rodríguez Fernández, Francisco Bank margins Specialization Market structure Most of the theoretical and empirical literature on bank margins has dealt solely with interest margins. Applying the seminal Ho-Saunders model (JFQA, 1981) to a multi-output framework, we show that the relationship between bank margins and market power (controlling for risk) varies significantly across bank specializations. Using a set of both accounting margins and New Empirical Industrial Organization (NEIO) margins, we find that market power rises significantly with output diversification to wards non-traditional activities. These results contribute to explain the paradoxical coexistence of decreasing interest margins and higher market power found in previous studies. 2014-04-30T07:06:48Z 2014-04-30T07:06:48Z 2005 info:eu-repo/semantics/report Carbó Valverde, S.; Rodríguez Fernández, F. The determinants of bank margins revisited: a note on the effects of diversification. Universidad de Granada. Departamento de Teoría e Historia Económica (2005). (The Papers; 05/11). [http://hdl.handle.net/10481/31472] http://hdl.handle.net/10481/31472 eng The Papers;05/11 http://creativecommons.org/licenses/by-nc-nd/3.0/ info:eu-repo/semantics/openAccess Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License Universidad de Granada. Departamento de Teoría e Historia Económica