Effects of Interest Rate Increases on Borrowers and Banks
April 6, 2026
The rise in interest rates by the European Central Bank is expected to have both positive and negative effects on banks. The banks are likely to benefit from increased interest income due to loans with variable rates. However, there are concerns about the trajectory of credit expansion and the consequences of the energy crisis triggered by the war in the Middle East. Interest rates could reach 2.75% by the end of the year. Despite these worries, banks are continuing their credit expansion.