Page 4 sur 14  As a result households have started shifting towards term deposits, and so further increasing the average cost of funding for banks. Turning now to bank loans to households and firms, let me stress that this credit channel is of primary importance in the euro area - much more so than in the United States - as bank loans remain the dominant source of financing for firms, in particular for smaller firms.1 Overall, the growth rate of loans has slowed due to a combination of higher borrowing rates, lower demand, and - for firms tighter credit standards. (1) The cost of credit has risen significantly from exceptionally accommodative levels. Households in the euro area willing to buy a house at the end of 2021 could borrow at 1.3% in average whereas they have to pay almost 3.5% in March 2023, although significantly less in France (2.6%). Lending rates for firms  1  The average share of bonds in debt financing has increased over time but only makes up 30% of debt financing for firms. See Holm-Hadulla, F., Musso, A., Nicoletti G. and Tujula M. (2022) “Firm debt financing structures and the transmission of shocks in the euro area”, Economic Bulletin, Issue 4, ECB. Page 5 sur 14 have been rising still faster, from 1.3% at end-2021 to 4.2% today. Compared to 2005-2007, the increase in policy rates is much faster today.
The conditional inflation forecast is based on the assumption that the three-month Libor will remain at –0.75% over the entire forecast horizon. Despite depreciating somewhat in recent months, the Swiss franc is still significantly overvalued. Furthermore, inflation prospects have largely remained the same. We have therefore decided to maintain our expansionary monetary policy. The target range for the three-month Libor is unchanged at between –1.25% and –0.25%, and interest on sight deposits at the SNB remains at –0.75%. The interest rate differential with other currencies, even following the European Central Bank’s (ECB) mild interest rate cut, is thus still markedly higher than at the beginning of the year. The negative interest rate makes the Swiss franc less attractive, and continues to help weaken the currency. The SNB also remains active in the foreign exchange market in order to influence the exchange rate situation, as necessary. The negative interest rate and our willingness to intervene in the foreign exchange market are intended to ease pressure on the Swiss franc. Our monetary policy thus helps to stabilise price developments and support economic activity. Global economic outlook As our inflation forecast is heavily influenced by economic developments abroad, let me now present our assessment of the global economy. Global economic growth was weaker than expected in the third quarter of 2015. This was mainly due to subdued manufacturing activity around the globe and sluggish world trade.