Deregulation of Savings Bank Deposit Interest Rate: A Discussion Paper

This paper discusses the effects of bank competition on bank loan and deposit rate levels as well as on their responses to changes in market rates and, hence, on the monetary policy transmission mechanism. Given the prominent role of the banking sector in the euro area’s financial system, it is of significant importance for the ECB to monitor the degree of competitive behaviour in the euro area banking market. A more competitive banking market is expected to drive down bank loan rates, adding to the welfare of households and enterprises. Further, in a more competitive market, changes in the ECB’s...
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Deregulation of Savings Bank Deposit Interest Rate: A Discussion Paper