According to the Bank of Greece’s latest Monetary Policy Report, the transmission of European Central Bank (ECB) monetary policy decisions to corporate lending rates in Greece has been symmetric — meaning banks have not raised rates more aggressively during tightening cycles nor delayed cuts during easing phases.
Symmetric Rate Adjustments Observed
The Bank of Greece analyzed interest rate developments for new business loans to non-financial enterprises between July 2022 and October 2025. It found no evidence that banks increased lending rates disproportionately during the recent upward cycle or reduced them more slowly during the subsequent downward phase — a pattern sometimes associated with oligopolistic behavior or weak competition.
This symmetry applies both to the speed and extent of rate adjustments. The report notes that such balanced transmission “reflects satisfactory competitive conditions in the banking credit market.”
Easing Conditions Confirmed by Multiple Sources
Consistent with these findings, data from the SAFE survey show that Greek small and medium-sized enterprises (SMEs) reported successive reductions in borrowing costs in 2025. Similarly, banks’ responses to the Bank Lending Survey indicated a loosening of corporate credit terms — driven primarily by lower lending rates and a narrowing of interest rate margins.
Signs of Market Normalization
The Bank of Greece attributes the improved symmetry to stronger competition among credit institutions, particularly for high-creditworthiness borrowers. Compared to the global financial crisis and the Greek sovereign debt crisis — periods marked by fragmented and dysfunctional money markets — current dynamics signal a return to more normal market functioning.
While corporate loan pricing remains closely linked to Euribor rates, the report notes that other factors — including bank funding costs, risk assessments, and regulatory requirements — also influence final lending rates.