Drivers of diverging financing conditions across Member States

Anton Jevcak and Lucian Briciu

Quarterly Report on the Euro Area (QREA), 2013, vol. 12, issue 1, 19-25

Abstract: The dispersion both of bank lending rates to the non-financial private sector and of overall financing costs for the corporate sector has increased considerably across the euro area throughout the recent crisis period. Such divergence has occurred despite the existence of a single monetary policy implemented through the provision of liquidity to the euro area banking sector under the principle of equal treatment. It does not seem to have been significantly affected by the ECB's new OMT programme. Available evidence suggests that greater cross-country variation in some structural characteristics of national banking systems, such as the quality of loan portfolios, profitability or the size of capital buffers, together with divergent financial positions of non-financial private sectors and sovereign funding costs, contributed to the increase in dispersion of bank lending rates at the country level.

Keywords: financing; conditions (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:euf:qreuro:0121-02

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