In the following, I will briefly discuss how financial innovations could have modified the interest rate channel and the bank lending channel of monetary policy transmission 6.1  Interest rate channel  Increased competition in banking together with an enhanced availability of alternative capital market-based instruments for financial investment has likely amplified and/or sped-up the effects of monetary policy changes on bank interest rates (and, ceteris paribus, on output and inflation): Increased competition between banks, but also between banks and different other financial market segments led to a closer relationship between market and bank interest rates.
* * * Ladies and Gentlemen, Let me start by noting the exceptional nature of the corona crisis and by acknowledging my deepest gratitude to all those who are fighting this unprecedented global threat in the frontlines, in healthcare and elsewhere. We are facing a severe humanitarian crisis on a global scale, which indeed calls for a coordinated global response.