Needless to say, an increase in the current account balance results in a decline in overnight interest rates. Once overnight interest rates reach zero percent, however, we can no longer expect a change in interest rates to promote portfolio rebalancing.
Some institutions have grown so vital for financial stability that they have become systemically important and their failure is not a socially acceptable option. During the financial crisis, government authorities had no other choice then to save these institutions. At the same time losses of external capital providers were kept to a minimum.