The ECB published January bank lending rates the day before yesterday, with a slight fall of -1bp to 5.1% in new corporate loans (third consecutive month of declines) and -13bp to 3.9% in new loans to households (for the second consecutive month).
Among the major European economies, Spanish and French corporate loans lead the January tightening (-11bp to 4.9% and -5bp to 4.8% respectively), in contrast to the 12bp widening of the German lending rate to 5.3%, while Italian loans have only widened by 1bp in January but are quoted with the widest interest rate at 5.5%.
There has been a slight fall also in the interest rate paid on European deposits, while the shift from overnight deposits to term deposits and money markets continues. The ECB also published yesterday the interest rates paid on Eurozone bank deposits, with a slight fall of 9bp in January in the rate on household term deposits to 3.2%, still close to a 14-year high (since 2009) but well below the ECB’s 4% deposit rate.
This is a singular fact since, historically, the deposit rate has always been higher than the ECB’s depo rate, except in the current context of rising rates. On the other hand, this 3.2% rate on time deposits maintains a high differential with respect to the 0.38% paid on overnight deposits, so it is not surprising that there is a progressive shift from overnight deposits (-€749mm year-on-year) to time deposits (+€819mm) and money markets (+$135mm, source EPFR).
Among the large European economies, interest rates on new household deposits are highest in Italy (3.8%) and France (3.7%), while on the other side of the scale are Spanish household deposits, with a remuneration of 2.4%. Interest rates are more homogeneous in company deposits: 4% in France, 3.7% in Italy and Germany and 3.6% in Spain.
