How a historic drop in bank deposits shapes banks' loan supply? We exploit the effects of a large, and unexpected, increase in monetary policy rates to estimate the deposit channel of monetary policy using an extensive credit register that includes all bank-firm lending relationships in all euro...

Using granular data of German banks for the 2003 to 2018 period, we analyse the determinants of bank rates on retail deposits. We find that a bank's rate on sight deposits is especially low if the bank operates in rural districts, if it is not exposed to strong competition and if it provides...