Therefore, if we want to see continued growth of bank lending to creditworthy borrowers, it is unavoidable that bank lending rates and, therefore, interest rate spreads, must be reduced substantially.
If banks are to narrow their net interest margins without  2  BIS central bankers’ speeches  reducing their profits, they must become more efficient and control their operating costs, perhaps by exploiting economies of scale and scope. The second area where I think there is some justifiable concern about the performance of banks is the sectoral composition and characteristics of bank lending.