In the online account world, the transactions costs of switching are very low, and the evidence is that the response rate to small interest rate differentials is rapid.
When I say “central,” I mean that this mechanism may play a role not only in determining how monetary policy influences the pricing of credit risk, but also in how it shapes the real and nominal yield curves for credit-risk-free Treasury securities. Of course, much work remains to be done before statements like these can be made with any degree of confidence.