A key feature of the financial crisis was that the cost to banks of unsecured term funding rose sharply relative to expected policy rates and did so heterogeneously across banks. This paper examines the pass-through of bank funding costs to retail loan and deposit rates in the United Kingdom,...

The flow of new bank lending to UK households and businesses fell sharply following the start of the global financial crisis in mid-2007. That provoked an ongoing debate about the extent to which the sustained weakening of bank lending was caused by a fall in demand for credit, or a fall in...