Overall, the above examples clearly show that the regulatory framework can have important implications for macroeconomic outcomes and thereby can have direct consequences for monetary policy-making. At the same time, the regulatory framework may equally affect the transmission of monetary policy through its impact on the aggregate behaviour of the banking sector and, hence, also affect the effectiveness of monetary policy.
These considerations will be reflected in our supervisory focus over the coming period. As set out in our most recent Consumer Protection Outlook Report, poor practices may seek to exploit consumers’ behavioural vulnerabilities and we have seen the widespread use of differential pricing in the motor and home insurance markets leading consumers to be charged for their loyalty.