I would argue that if it is a mere redistribution it might be dangerous: how do we know that we won’t have a repeat of 2007, when we saw that vast pockets of risk had gone undetected and had grown to such an extent that they threatened the stability of the whole financial system?
Our decision to further lower the OCR does increase the potential risk of further fuelling increases in asset prices, including within the housing market. This is one of the difficult tradeoffs that we have had to confront. The risks here are partly balanced by our macro-prudential policy moves that will further boost the resilience of the banking system.