But if growth was to falter and inflation was to fall yet further, the effective lower bound on nominal interest rates could limit the Committee’s ability to provide the needed degree of accommodation. With an already large balance sheet, for example, the FOMC might be concerned about potential costs and risks associated with further asset purchases.
Westpac again has been at the forefront of such developments. One product that we are keen to push is the Export Finance Facility where eligible exporters can access bank loans at low interest rates. Unfortunately, for some reason, it has not been used much by exporters and the banks.