In 1980, around a third of bank deposits were either in interest-free current accounts or in low-interest passbook accounts. Twenty years later, that proportion was down to around 5 per cent. Not only did this proportion decline, but the relative benefit to banks from any given amount of low-interest deposits has fallen substantially, as the overall interest-rate structure has come down.
Graph 2  Another important development on the liabilities side, which I alluded to earlier, was that an increasing proportion of banks’ funding was coming from wholesale sources.