Interest rate pass-through since the financial crisis

15 September 2013

Policy rates in advanced economies are at record lows and central banks have resorted to unconventional policy tools, but there are concerns that the low policy rates have not been transmitted to lending rates for households and non-financial firms. In this special feature, we investigate whether the pass-through of monetary policy to rates on bank loans to nonfinancial firms has been impaired in the aftermath of the Great Recession. Our results suggest that the difference between lending rates to the non-financial corporate sector and policy rates is currently close to the pre-crisis level in the United States and Germany, but remains higher in peripheral euro area countries.

JEL classification: E43, E52, C32