abstract:Net interest spread refers to the difference in borrowing and lending rates of financial institutions (such as banks) in nominal terms. It is considered analogous to the gross margin of non-financial companies.
One of the things we talk about in the paper is net interestspread. That is simply the difference between what bankspay borrowers and what banks charge.
American Express earns a netinterest income on the spread between the rate it earns from un-loaned amounts sitting in bank deposits and short-term investments in financial securities and the rates at which it extends credit to card members.
First and foremost, ever-present low interest rates have squeezed bank profitability as measured by netinterest margin, or the spread between what banks pay to borrow and what they're paid to lend.