Banks tend to adjust their lending rates only sluggishly in response to changes in monetary policy rates. 3 The stickiness of bank rates hinges among other things on financial structures and competition within the banking sector as well as on competition from market-based sources, including securitisation.
4 Supervisory information on banking activities, such as the use of credit transfer instruments and the relative importance of assets and liabilities held for trading, can be useful in enhancing this analysis. Another transmission channel often cited in the literature which has received increasing attention over the past two decades is the credit channel.