The bank lending channel is generally expected to have lost importance due to the financial development of the recent years: Banks’ flexibility to react to an interest rate hike has increased, and the dependency on bank loan supply has declined.
While the current turmoil has significant interaction with the international financial system, the recent crises would arguably have been better contained if long-maturity property loans had not accentuated the usual mismatch between maturities of assets and liabilities of domestic financial systems that were far from robust to begin with. Our unlamented savings and loan crises come to mind.