This includes both government bonds with a 20% risk weight in that approach, and covered and corporate bonds with an external rating of at least AA-. BIS Review 125/2010  3  increase of interest rates for maturities longer than the threshold established by the regulation (30 days) as compared with shorter maturities. This would imply a steeper money market yield curve.
Such effects are important for central banks – a point I will consider later on. First, less active money markets, and a corresponding higher volatility of short-term interest rates, could make the transmission of monetary policy signals more difficult and less precise.