We should be careful not to extend this pro-regulation attitude to other product and service markets where some regulatory easing is needed. Were not this the case, the outcome would be to weaken competition and increase monopolistic rents, favoured by administrative burdens and inefficiencies. Innovation and the evolution of productivity would be impaired in the long run, with negative consequences for economic growth.
Financial institutions’ lending attitudes have been proactive, and lending rates have declined to around historical low levels. In these circumstances, the year-on-year rate of increase in the amount outstanding of bank lending has accelerated at a moderate pace to the range of 3.0-3.5 percent. Meanwhile, firms’ financial positions have improved for all firm sizes.