Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297336 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2896
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
I study the transmission of monetary policy to deposit rates in the euro area with a focus on asymmetries and the role of banking sector concentration. Using a local projections framework with 2003-2023 country-level and bank-level data for thirteen euro area member states, I find that deposit rates respond symmetrically to an unexpected tightening or easing of monetary policy. However, more concentrated domestic banking sectors do pass-on unexpected monetary tightening (easing) more slowly (quickly) than less concentrated banking sectors, which contributes to a temporary divergence of deposit rates across the euro area. These results suggest that heterogeneity in the degree of banking sector concentration matters for the transmission of monetary policy to deposit rates, which in turn may affect banking sector profitability.
Subjects: 
Monetary policy
deposit rates
banking sector
market power
JEL: 
D40
E43
E52
G21
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6376-3
Document Type: 
Working Paper

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