But with agents facing fewer and fewer capital market imperfections, the relationships between asset price changes and balance sheet adjustments seem to be of increasing importance to the course of the economy over time. This is where more attention needs to be focused by modellers and forecasters, as well as policy-makers.
In recent times, credit institutions have not exactly distinguished themselves as hotbeds of innovation – at least relative to fintechs. Though banks have, in the meantime, initiated their own innovations – up to now, fintechs have proven to be the drivers of digitalisation. That said: it is not individual ideas we are talking about, but a bank’s overall package.