Our survey of businesses in the first quarter of last year found that four out of five would have trouble meeting an unexpected boost in demand—a record high.1 This pressure showed up very clearly in the labour market. The number of vacant jobs rose to nearly twice the pre-pandemic level, an obvious sign of widespread labour shortages.
This would reduce excess liquidity in the banking system and put upward pressure on interest rates in the interbank and bond market, which could counteract the reduction of policy rates. But this is not what we have seen so far. Despite the discussion on the adverse consequences of a negative deposit rate, there was no significant impact on the functioning of money markets.