Alessandro Gavazza, from LSE, will present "Bank Deposit Pricing in the Euro Area"

Abstract: We investigate the supply and demand drivers of bank deposit pricing in the Euro area during the period 2007–2023. We document that the pass-through of policy rates to deposit rates is low, most notably for sight deposits and varies across the monetary policy regimes. The magnitude of the deposit rate pass-through is shaped by market structure and bank characteristics. We build and estimate an equilibrium model of bank deposit markets, and find that the price sensitivity of sight and term deposits displays large heterogeneity across countries, banks, and years. Our analysis highlights possible explanations for the sluggish increase of deposit rates following the recent hike in the European Central Bank’s policy rates starting in 2022.