Regulatory Alerts2026-09-04
Added
Bank Lending in the Euro Area: The Role of Bank-Firm Switching and Market Concentration
Firms in the Euro area that switch banks initially receive more favorable lending conditions, including lower interest rates, higher loan amounts, and longer durations, compared to firms that do not switch. The magnitude of the interest rate reduction is positively correlated with credit market concentration, with larger reductions in more concentrated markets, though fewer firms switch in such areas. However, these advantages are limited in extent and duration, as subsequent loans from the new bank tend to revert to conditions offered to existing comparable clients.
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