The anatomy of transmission: pass-through of market rates to bank deposit rates in the euro area

2026

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This paper analyzes how market interest rate changes are passed on to bank deposit rates in the euro area, revealing significant but uneven transmission influenced by deposit type, interest rate environment, and banking sector structure.

* Examines the dynamics of pass-through over time, across different interest rate regimes (normal vs. low), and among euro area countries.
* Investigates key drivers of pass-through, including bank balance sheet characteristics, market concentration, and customer switching behavior.
* Finds that pass-through is stronger for term and corporate deposits than for demand and household deposits, and is significantly weaker in low-interest-rate environments.

Tags: deposit rates, market rates, pass-through, euro area, bank competition

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