In preparing this speech and reflecting on the terms ‘resilience’ and ‘adaptability’, I recalled how the natural sciences often define intelligence as the ability to ‘adapt’ to new situations and to change behaviour on the basis of the ‘obstacles’ in the external environment.
In the current environment of excess liquidity, the relevant overnight interest rates have shifted close to the deposit rate. In this situation, reductions in the deposit rate could push down overnight interest rates further. At the same time, possible caveats and unintended side effects of this move have to be kept in mind.