With the interest rate cut of 25 basis points on June 6, 2024, the ECB’s rate hike cycle has officially come to an end. Previously, the ECB had raised interest rates by a total of 4.5% or 450 basis points within 14 months. This followed for more than a decade of almost continuous interest rate cuts. The turnaround in interest rates can therefore be described as historic in several respects.
Table of Contents
The UnitPlus overnight money index for companies
With the end of the interest rate turnaround, UnitPlus is publishing an index for the first time that measures interest rates on overnight deposits for companies. The index was developed, implemented and calculated by Barkow Consulting, a leading consulting and analysis company in the financial sector. The UnitPlus Overnight Deposit Index shows the average interest rate on call money for companies throughout Germany for the first time. The UnitPlus Overnight Deposit Index is based on aggregated and volume-weighted data from 200 leading banks in Germany.
Overnight interest rate at lowest level since 10/23
For the first time, the UnitPlus Overnight Deposit Index can also be used to measure the extent to which banks have passed on the ECB’s interest rate hikes to their corporate customers. The UnitPlus Overnight Deposit Index currently stands at 1.78% p.a. This is already well below the high of 1.91% p.a. in May. This means that the banks have already reacted significantly to the ECB’s interest rate cut and have passed on around half of it.
Methodology & Data
The UnitPlus Overnight Deposit Index for corporate clients was designed and implemented by Barkow Consulting and calculated on a daily basis. The underlying interest rate data comes from a representative, stratified and volume-weighted sample of the German banking supervisory authority, which currently comprises around 200 domestic banks. The banks are selected according to their size in the respective stratum or bank class and are regularly adjusted. Regional criteria are also taken into account in the selection process.
Based on this, the proportion of non-interest-bearing components is eliminated. The monthly values are intrapolated and extrapolated on the basis of short-term interbank interest rates and the banks’ historical interest rate pass-through behavior and thus transformed to daily values.
Barkow Consulting uses classic methods of descriptive statistics in combination with machine learning methods to calculate the UnitPlus Overnight Deposit Index for companies. The final model selection is based on the historical forecast quality combined with expert knowledge from decades of market expertise.
More information on the call money index
We are happy to provide the complete study with additional information on longer-term developments and a comparison with inflation. Interested companies or press representatives are welcome to contact presse@unitplus.eu.