Monetary policy normalisation also entails a reduction of the central bank footprint in financial markets, a decompression of term premia, and some repricing of risks. As long as such repricing is not excessive, it can in fact be combined with a somewhat lower terminal policy rate that would still be compatible with medium-term price stability.
This share compares with a peak of 40 percent in 1993 and an average around 30 percent thereafter.4 Moreover, nonbank financial service providers who offer a range of products, such as payday loans, check cashing, remittance services, and other services, have proliferated in recent years and target lower-income areas in particular.