Low interest rates place a strain on the banks
Putkuri, Hanna; Savolainen, Eero (07.06.2016)
Volyymi
90Numero
2/2016Julkaisija
Bank of Finland
2016
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201606101186Tiivistelmä
The current exceptionally low level of interest rates promotes price stability and economic growth in the euro area, but it also puts a strain on retail banking profitability. In Finland, the banks’ most important source of income, net interest income, is now exposed to pressures from several different directions at once. Low interest rates have compressed the spread between lending and deposit rates. At the same time, loan and deposit stocks have increased only slowly. Low interest rates have reduced customers’ debt-servicing expenditure, but may also mask risks.