Under a negative interest rate policy, the former have made higher profits than the latter. This is partly because funding costs of financial institutions in Europe have decreased against the background that the low interest rate environment has lasted for a shorter period than in Japan, and therefore there has been room for a further decline in deposit interest rates.
Also, in Europe, the share of deposit funding to overall financial liabilities is low, and the costs of market financing such as issuing corporate bonds have been declining. Moreover, financial institutions in Europe have secured various sources of revenue that are unsusceptible to changes in interest rates by, for example, diversifying fees on services (Chart 14).