Structure of the Cost of Deposits in Selected EU Countries

As a result of the crisis of confidence in the financial markets caused by events that took place in the years 2007-2008 and later fiscal problems in the peripheral countries of the European Union, banks lost their ability of refinancing based on unsecured interbank deposits. This contributed to the growth of the importance of deposits from non-financial customers whose cost started differing significantly from money market indices based on the interbank market. Moreover, strong divergence between the rate applicable to off-balance-sheet items (OIS) and a price of cash applicable to balance-sheet flows appeared. This article analyses changes in the structure of interest rates in various segments of the market in four selected countries of the EU: two countries from the Euro Zone and two non-Euro Zone countries. Observations from the money market indicate that it is economically justified to create separate benchmarks for balance-sheet and off-balance-sheet items