Latest / The European Economy Podcast with Fexingo: ECB, Eurozone, and Continental Markets
Why Eurozone Cash Is Piling Up While Banks Hoard Reserves
In this episode of The European Economy Podcast, Lucas and Luna examine a puzzling disconnect in the Eurozone: despite the ECB cutting rates by 75 basis points over the past two quarters, commercial bank lending to businesses remains flat, while overnight deposits at the central bank have surged past €4.2 trillion. They break down why banks prefer earning the ECB's deposit facility rate of 3.25% over lending to firms, how this 'lending strike' is choking small and medium enterprises in Italy and Spain, and what it means for the broader economic outlook. With real GDP growth at…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.