(Finance) – “The cut in official rates is being passed on to the cost of bank funding and to that of credit in line with historical regularities”. This was stated by the Bank of Italy in the latest Economic Bulletin.
It is highlighted that between August and November the marginal cost of bank funding And fell 26 basis points (to 1.7 percent). The drop in rates on the interbank market, the lower cost of bond funding and the decline in the yield on new deposits with a pre-established duration contributed to this; the rate on current account deposits, on which the monetary restriction of the 2022-23 period had been reflected to a limited extent, remained unchanged (0.5 percent).
There bank funding continued to contract (-2.2 percent over twelve months): the repayment of the TLTRO3 funds and the decline in liabilities held by non-residents was only partially offset by the growth in other sources of financing.