Orbit36 Analysis for Swiss Banking Association

Orbit36 was asked by the Swiss Banking Association to conduct an analysis over the development of the interest rates on savings accounts. In the study, we examine the nexus between the interest rates on mortgage loans and savings accounts. We show that the interest margin on these products reduced during the negative interest rate regime by around 20-30 basis points. With the change to positive interest rates in 2022, the interest rate margin recovered to the level in 2015. Despite the banks’ interest rate hedging activities, the average interest rate earned on loans to customers only increases slowly. This gives banks limited headroom when adjusting the interest rates offered on savings accounts. Further, the starting point is different across banks, which reflects in a high heterogeneity of their savings rate offerings.