Gregorio Impavido, Alberto R. Musalem, and Thierry Tressel compute simple correlations between the variables. These simple statistics show a strong correlation between the development of contractual savings institutions and banks characteristics. Finally, we provide panel data analysis (GLS without and with fixed effect estimates, with a correction for heteroschedasticity). Our bank level data are aggregated at the country level for each year. The intersection of the various data set (Bankscope, Institutional Investors Data base, and World Bank Indicators) provide a sample of approximately 200 observations, and 8 years at best per country.

# **III EMPIRICAL RESULTS**

## **_lIMA Descriptive statistics_**

Table 1 presents the sample of countries that are included in our contractual savings database, and the total number of banks available for each country. We have data for 34 countries, including 13 emerging economies (Argentina, Brazil, Chile, Hungary, India, Korea, Malaysia, Mexico, Singapore, South Africa, Sri Lanka, Thailand and Turkey). The contractual savings data include information on total financial assets and portfolio composition for pension funds and insurance companies (in particular corporate stocks), except for 6 countries for which we have no information on equity investments (Austria, Brazil, France, Japan, Spain, and Turkey). The Bankscope database has a very comprehensive coverage in most countries, with banks included roughly accounting for 90 % of total banking assets (Demirguc-Kunt and Huizinga (1999)).

Table 2 provides the definition of the variables used in the regressions. As described in detail in Impavido, Musalem and Tressel (2001), there has been a spectacular increase<sup>23</sup> in the total assets managed by pension funds and life insurance companies,<sup>2 4</sup> 25 relative to GDP. Expressed in rate of growth, the increase is even more impressive. Contractual savings financial assets, relative to GDP, have been growing at an average annual rate of 17.7%, 3.4%, 6.9%, 6.0%, 7.9%, 8.99% and 4.6% respectively in France, Germany, South Africa, the United States, the United Kingdom, Chile and Korea. As shown by Impavido and Musalem (2000) and discussed also in Impavido, Musalem and Tressel (2001), this development has been similar, in term of growth, to the development of capital markets, and may partly explain this evolution.

Table 3 provides simple descriptive statistics while Table 4 displays the correlation between the main variables. Net interest margins display some slight differences between countries, when averaged over the period, with a maximum value of 7.71% for Turkey and a minimum of 1.05% in Switzerland. Argentine banks are the most capitalized, on average (14.62% of total assets), while Belgium ones are the least capitalized (3.64%). Banks have the highest proportion of loans in their assets (72.7%) in New Zealand, while those in Brazil have the lowest proportion of loans (33.9%). The maturity of loans exhibits also significant differences (we have the information on loan

> 23 Singapore is the only country in which contractual savings assets decreased relative to GDP.

> **24** Musalem and Impavido (2000) show, on this sample of countries, that this explosion of contractual savings institutions may partly explain the rapid growth of stock markets over the last 15 years.

> **25** In France, where pension funds are underdeveloped, the life insurance industry exploded at the beginning of the 90s as a result of strong fiscal incentives to save in life-insurance products (these savings were exempt of taxes).

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