On the contrary Rate increase reference interest European Central Bank (AMB)Spanish banks they just rose fee deposit this year so far. Organizations acknowledge this they will have to start sooner or later repays the savings, but the time to start doing this is constantly delayed (which increases your earningsbecause of their interests, credit yes they are on the rise). Also, households should not wait stunning guys. Average interest on deposit not to exceed 2% in one to two years and even stay down, according to various financial sources. compared to inflation While it is expected to be higher, this loss of purchasing power will continue in the medium term.
this Spanish banksThus, deposit rates rose. 2.5 times less He European average In the last year. According to the latest ECB data released Friday, October had an average rate of new time deposits to contracted individuals. eurozone 0.98%, 0.74 points higher than the same month of the previous year. Inside SpainOn the other hand, the average rate 0.34%, up 0.29 percentage points year on year. It may not seem like a big difference, but it does make European banks pay for liabilities at a cost. 155% more than Spaniards and up to a level almost three times higher. To put it in perspective, the ECB rates increased by two percentage points.
up to 2%
In its latest financial stability report, the Central Bank of Spain noted that the transfer of the increase in Euribor to deposit interest was on the agenda. “much lower and lower than observed in the past”despite pointing out “It may intensify in the coming months”. The supervisor has conducted an econometric analysis from which, based on historical experience, organizations can conclude: movement to home deposit 66% of the increase euribor Between December 2021 and the same month of 2024. Given that this will rise to around 3%, this is deposit about 2%but noting that macro-financial conditions may differ from those in past stressful periods.
Moreover Juan Carrascoassociate partner of consultancy Bain & Company“It’s not unreasonable to think that there might be average deposit types in Spain,” he says. 2% or more In 2023″. The price of these products, he explains, is basically ECB rates (in his opinion it can continue to rise from 2% to 3.5-4%), as well as the premium bank liquidity estimated to be increased by higher probability of default customers in the face of economic disruption. withdrawal of liquidity by the ECB).
“In the period 2000-2008interest rates were in the 3-4% range and repayment offered for one-year deposits about 2.5%. Also, it’s important to note that it’s there. some European bankssuch as Banca Progetto (Italy) and Younited (France), which are already yielding greater than 2% In 12-month deposits,” Carrasco points out.
Euribor earrings
There are also experts who predict that the interest on deposits will increase. will not reach 2%. “It seems like a very high fee in their current state, but seeing is not overlooked either. close values If the price of money is around 3-3.5 percent, it is at this level by the end of 2023. alberto vallemanager at consulting company Precision. extreme bank liquidityargues that means they don’t have “incentives” to raise the liability ratio. “We believe that turning point It will be when the ECB’s TLTRO loans to institutions are past due between 20-24 to begin to see the return on deposits above 0.5%. March and June 2023moment when the bank may need liquidity”, he states.
From a financial institution, the types of deposits available are shared. about 2%but be warned will be connected evolution euribor. this marketit really is reduce these days forecasts In this regard, he is faced with messages from central bankers that they can soften the future rate hikes. Thus, now Euribor is expected to be below 3% at the end of 2023 and below 2.5% At the end of 2024, it is expected that the return on deposits may be lower, although market expectations are low. very variable.
More deposits than loans
One industry analyst also sees deposits below 2%. “It will transfer to the average rate of rise in Euribor historically less. Wars to seize high-rate liabilities have arisen when organizations are under-capitalized and also needing liquidity, now excess: loans less than deposits (which accounts for 90% of them), unlike the previous crisis (170). In addition, in recent years they have made money from deposits. mutual funds and some will stay there. can always be Big bank crashing the market deposit to attract customers, but it seems unlikely. And to be such a angry customer go to another being, because won’t offer it There is much more interest,” he says.
It is also noted from the financial sector that controlled credit growthThis is another argument not to expect a significant increase in interest in term savings, both current and projected: the less loans increase, the more less need you have to finance them deposit. Curiously, a derivative of the small increase in their wages, loan types but they go up less than in the past and EuropeAs stated by the Bank of Spain. In other words, if the yield on deposits eventually increases marginally, it is possible that the yield on the new loan will increase, albeit to a lesser extent. IT Borrowers benefit from at the expense of savers and conflicts with monetary policy Restrictive policy promoted by the ECB to fight inflation.