In the United States, where the syndicated loan market is  4  BIS Review 2/2004  firmly established, covenants are seen performing a triggering role: when borrowers experience difficulties in honoring the terms of their covenants, this prompts discussions with their banks and the implementation of recovery measures.
Though the rising New Zealand dollar over this period has offset the impact on local prices a bit, the impact of the oil price shock on CPI inflation over this time is clear, and it accounts for a large part of why CPI inflation is where it is today.