Details Matter: Loan Pricing and Transmission of Monetary Policy in the Euro Area

Karlis Vilerts, Sofia Anyfantaki, Konstantins Benkovskis, Sebastian Bredl, Massimo Giovannini, Florian Matthias Horky, Vanessa Kunzmann, Tibor Lalinsky, Athanasios Lampousis, Elizaveta Lukmanova, Filippos Petroulakis and Klavs Zutis
Additional contact information
Karlis Vilerts: Latvijas Banka
Sofia Anyfantaki: European Central Bank
Konstantins Benkovskis: Latvijas Banka
Massimo Giovannini: Bank of Malta
Florian Matthias Horky: Národná banka Slovenska, Zeppelin University
Vanessa Kunzmann: Bank of Malta and Deutsche Bundesbank
Athanasios Lampousis: Bank of Greece
Elizaveta Lukmanova: Central Bank of Ireland and KU Leuven
Klavs Zutis: Latvijas Banka

No 8/RT/25, Research Technical Papers from Central Bank of Ireland

Abstract: Does the maturity of the relevant risk-free rate influence the strength of monetary policy pass-through to interest rates on new loans? To address this question, we present novel empirical evidence on lending practices across all euro area countries, using AnaCredit data covering nearly seven million new loans issued to non-financial corporations in 2022–2023. We document substantial variation in (a) the prevalence of fixed- vs floatingrate loans, (b) rate fixation periods, and (c) reference rates. This variation results in lending rates being exposed to different segments of the riskfree rate yield curve which, in turn, influence their sensitivity to monetary policy changes. We show that loans linked to shorter-maturity risk-free rates experience more pronounced monetary pass-through. Importantly, this effect is not purely mechanical, as part of the effect is offset by adjustments in the premium, revealing previously less-explored heterogeneity in the passthrough to lending rates.

Keywords: Lending Rates; Interest Rate Pass-Through; Fixed-Rate Loans; Floating-Rate Loans. (search for similar items in EconPapers)
JEL-codes: E43 E52 E58 G21 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-eur
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Related works:
Working Paper: Details matter: loan pricing and transmission of monetary policy in the euro area (2025)
Working Paper: Details matter: loan pricing and transmission of monetary policy in the euro area (2025)
Working Paper: Details Matter: Loan Pricing and Transmission of Monetary Policy in the Euro Area (2025)
Working Paper: Details matter: Loan pricing and transmission of monetary policy in the euro area (2025)
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