No. 1490 - Friends or foes? Banks' deposits and digitalization during monetary tightening
The paper analyzes the effects of the monetary tightening phase started in July 2022 in the euro area on the amount of (sight and term) deposits and related interest rates of Italian banks. In particular, the analysis assesses whether 'high digital' banks, i.e. those whose customers mainly use online money transfers, are more exposed to the risk of a deposit outflow during monetary tightening.
Following the increase in monetary rates, there were no significant differences among banks in the dynamics of sight deposits and the related interest rates. In contrast, household term deposits and the interest rates on them grew more among high digital banks than other intermediaries. This higher increase was driven by the results of larger, more profitable banks and of intermediaries with a low initial share of term deposits. Finally, it had no negative effect on the profitability of high digital banks.
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