Determinanten van de debetrentes toegepast door Belgische kredietinstellingen

Given the importance of bank credit in Belgium as a financing source for both households and non-financial firms, it is important to know how Belgian banks react to a monetary policy shock. Since the direct influence of central banks is confined to the very short-term market interest rates, financial intermediaries play a very important role in the transmission of these shocks to the real economy. This paper therefore investigates the determinants of the rates charged by individual Belgian banks for a number of standardised forms of credit. The data used are mainly from a survey conducted by the National Bank of Belgium and relate to the period from January 1993 to September 2000. It is shown that Belgian banks set their credit rates as a stationary mark-up on top of the market interest rate with a maturity similar to the one of the credit contract. This mark-up seems to depend on a number of factors. First, it varies between the different forms of credit we studied in this paper. On average a higher rate is charged for those credit forms that are characterised by a longer maturity, a higher risk and/or a lower amount. Second, for a given form of credit the mark-up also varies across banks. Large and/or liquid banks tend to charge lower rates, whereas highly capitalised banks seem to charge higher rates. Third, the mark-up although stationary does change over time, decreasing with the business cycle and increasing with the cost of the bank's resources which are approximated in this paper by the rates paid by the bank on deposits and/or savings notes. This study indicates that especially the Belgian market for investment credits is characterised by a very tight competition. This conclusion follows from the fact that the mark-ups on these credits do not seem to be influenced by bank specific characteristics such as size, liquidity or capitalisation. Moreover, the mark-up does react strongly to monetary shocks and does have a significant impact on the demand, indicating that the demand for investment credits is very price elastic. On the Belgian markets for short-term credits, consumer credits and mortgage spread loans, however, the degree of competition seems to be lower. The mark-ups on these credit forms do depend on at least one of the bank characteristics used in this paper. Finally, especially the rates on short-term credits seem to react strongly to monetary shocks, a response which is positively related to the size of the bank.