This problem can be addressed by adapting the tools we have, of necessity on an ad hoc basis, and this is what has been done to produce the forecast given in Figure 12, in which account is taken of the rapid loss of confidence following the collapse of Lehman Brothers.
In particular, it is posited that intermediaries’ greater fundraising costs may be reflected in an increase in average lending rates that is greater than that defined only as a function of policy rates and obtained by estimating the relation between financial operators’ risk exposure gauged by the increase in bond spreads and household and business funding costs.