Most models generally assume that there is no obstruction to the interest rate pass-through to the rest of the economy. However, at the peak of the financial market crisis towards the latter part of last year, commercial banks started to raise their credit lending standards and criteria.
The well-prepared financial institution will have completed steps (i) to (iii). It will now be engaged in step (iv) -- renovating systems and applications. The recommended completion date for this work, to allow sufficient time for testing, is the end of 1998. The renovation of critical systems should be finished by the middle of 1998.