Financial Outlook of the OIC Member Countries 2016
20
Figure 15: Stock market total value traded to GDP (%)
Source: COMCEC Coordination Office staff estimations by using Global Financial Development Database, World
Bank (2016b).
Financial Efficiency 3.3
Financial efficiency is about how efficient the financial intermediaries operate. Therefore, the
basic measures of this characteristic are related to the cost of financial services. Closely related
to the cost measures are profitability measures since the lower costs usually accompany with
higher profitability. However, note that profitability may be high for inefficient financial
systems during financial turmoil. Therefore, selected one cost and two profitability measures
should be used in combination rather than in isolation.
Bank Lending-Deposit Spread (%) shows the spread between obtaining and crediting the fund.
This spread is the rate that a bank covers its operating and overhead costs and makes profits.
The less the spread associates with the high the efficiency of the banking system since banks
are very efficient to cover their costs with little amount of money obtained from firms and
individuals for using bank credits. Bank costs associated with credit activity also include non-
paid credits. Hence, for high risk economies, the spread tends to be high. This is also evident in
Figure 16. Bank lending minus deposit rate is about 6 per cent in the world for 2011 to 2014,
whereas the rate is 10 per cent for OIC-LIG and 8 per cent for OIC-LMIG.
Figure 16: Bank Lending-Deposit Spread (%)
Source: COMCEC Coordination Office staff estimations by using Global Financial Development Database, World
Bank (2016b).
0
5
10
15
20
25
OIC-LIG
Average
OIC-LMIG
Average
OIC-UMIG
Average
OIC-HIGH
Average
OIC Average World
2011 0,06 4,13 17,09 12,35 9,80 3,19
2012 0,06 3,33 14,47 14,39 9,46 3,07
2013 0,00 3,22 14,47 16,36 10,72 6,37
2014 0,00 3,01 14,83 21,79 11,84 9,74
0
2
4
6
8
10
12
OIC-LIG
Average
OIC-LMIG
Average
OIC-UMIG
Average
OIC-HIGH
Average
OIC Average World
2011 10,12 10,34 4,98 4,21 7,67 6,14
2012 10,26 7,68 4,81 3,98 6,64 5,95
2013 10,58 8,37 4,81 3,87 6,87 6,02
2014 10,10 8,46 4,97 3,80 6,74 6,06