FRANKFURT Jan 8 The difference in corporate
loan costs around the euro zone grew in November, suggesting the
European Central Bank's record low interest rates are still not
filtering through to all corners of the currency bloc evenly.
Funding costs for euro zone companies began to diverge as
the financial crisis laid bare country-specific risks, prompting
investors to demand premiums in some member states.
More than five years on, that divergence persists despite
the extraordinary measures implemented by the ECB.
The central bank ends its latest meeting on Thursday and is
widely expected to keep all monetary policy settings on hold.
The ECB's measure of country-by-country variation of large
corporate loan interest rates went up in November, although it
held slightly below its peak reached earlier last year, ECB data
showed on Wednesday.
The data showed that companies in Portugal had to pay 5.26
percent interest on new loans larger than 1 million euros in
November compared with 5.01 percent in October. In Belgium,
companies paid just 2.02 percent.
The ECB cut its main refinancing rate to a record low of
0.25 percent in November and is expected to keep it there until
mid-2015, a Reuters poll showed.
But it may discuss other options to enhance the transmission
of its interest rates when it meets on Thursday, after data last
week showed that lending to euro zone companies contracted at
the fastest pace on record in November.
ECB President Mario Draghi has commented on the problem
before, telling a European parliament committee in mid-December:
"In this crisis, interest rate cuts have been transmitted more
slowly and unevenly across euro area countries due to the
fragmentation of financial markets.
"To address this problem, we adopted in recent years a
series of non-standard measures. The purpose of these was - and
remains - a more effective transmission of the ECB's interest
rate cuts, so that our monetary policy can reach companies and
households throughout the euro area."
(Reporting by Eva Taylor; Editing by Hugh Lawson)