Moreover, the recent financial market turmoil has re-emphasised the importance and special nature of the banking sector in the transmission of monetary policy and determination of macroeconomic outcomes.
This suggests that the main constraint to loan growth has been on the supply side of the credit market rather than on the demand side, with banks turning down loan applications because of concerns about borrower creditworthiness or the realisable value of loan collateral, given the saturated state of the property market.