Part of these velocity declines reflected some reduction in the opportunity cost of holding money; interest rates on Treasury securities, which represent an alternative return on non-monetary assets, dropped more than did the average of interest rates on deposits and money market mutual funds in  BIS Review 21/1999  6  M2, drawing funds into the aggregate.
Even so, much of last year’s aberrant behavior of broad money velocity cannot readily be explained by conventional determinants. Although growth of the broad aggregates was strong earlier in the year, it accelerated in the fourth quarter after credit markets became turbulent.