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

Author

Listed:
  • Kārlis Vilerts

    (Latvijas Banka)

  • Sofia Anyfantaki

    (European Central Bank)

  • Konstantīns Beņkovskis

    (Latvijas Banka)

  • Sebastian Bredl

    (Deutsche Bundesbank)

  • Massimo Giovannini

    (Bank of Malta)

  • Florian Matthias Horky

    (Národná banka Slovenska and Zeppelin University)

  • Vanessa Kunzmann

    (Deutsche Bundesbank and Bank of Malta)

  • Tibor Lalinský

    (European Central Bank and Národná banka Slovenska)

  • Athanasios Lampousis

    (Bank of Greece)

  • Elizaveta Lukmanova

    (Central Bank of Ireland and KU Leuven)

  • Filippos Petroulakis

    (Bank of Greece)

  • Klāvs Zutis

    (Latvijas Banka)

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 7 million new loans issued to nonfinancial corporations in 2022–23. We document substantial variation in (i) the prevalence of fixed- versus floating-rate loans, (ii) rate fixation periods, and (iii) reference rates. This variation results in lending rates being exposed to different segments of the risk-free 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 pass-through to lending rates.

Suggested Citation

  • Kārlis Vilerts & Sofia Anyfantaki & Konstantīns Beņkovskis & Sebastian Bredl & Massimo Giovannini & Florian Matthias Horky & Vanessa Kunzmann & Tibor Lalinský & Athanasios Lampousis & Elizaveta Lukman, 2026. "Details Matter: Loan Pricing and Transmission of Monetary Policy in the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 22(2), pages 1-89, April.
    • Handle: RePEc:ijc:ijcjou:y:2026:q:2:a:1
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    1. is not listed on IDEAS
    2. Olivier De Jonghe & Konstantīns Beņkovskis & Karolis Bielskis & Diana Bonfim & Margherita Bottero & Tamás Briglevics & Martin Cesnak & Mantas Dirma & Marina Emiris & Pálma Filep-Mosberger & Valentin J, 2026. "Household Borrowing and Monetary Policy Transmission: Post-Pandemic Insights from Nine European Credit Registers," International Journal of Central Banking, International Journal of Central Banking, vol. 22(2), pages 91-194, April.
    3. Kerola, Eeva & Norring, Anni, 2025. "Effect of the countercyclical capital buffer on firm loans: Evidence from Germany," Bank of Finland Research Discussion Papers 8/2025, Bank of Finland.
    4. Maxime Gueuder & Sébastien Ray, 2026. "Projecting the Interests of a Dynamic Debt Portfolio: a Financial Model," Working papers 1033, Banque de France.
    5. Vilerts, Kārlis & Anyfantaki, Sofia & Benkovskis, Konstantins & Bredl, Sebastian & Giovannini, Massimo & Horky, Florian Matthias & Kunzmann, Vanessa & Lalinsky, Tibor & Lampousis, Athanasios & Lukmano, 2025. "Details matter – how loan pricing affects monetary policy transmission in the euro area," Research Bulletin, European Central Bank, vol. 135.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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