2.1 Changing patterns of bank assets 2.2 Changing patterns of bank liabilities 2.3 Do banks underestimate future macroeconomic risks? 3 Transition to the new normal 4 Implications for financial stability 4.1 Higher interest rates affect the valuation of banks’ assets and liabilities. 4.2 The cash flow of banks is affected by the speed of transmission of higher interest rates into net interest margins.
Signs of a change in longer-term inflation expectations – known as unanchoring or de-anchoring – were already evident in the United States before the first oil price shock. [3] In hindsight, the oil price shocks at that time were arguably no more than a catalyst for consumer price inflation that was already in progress.