But there are also situations where borrowers have physical collateral they can use to lower their cost of credit and improve access. We really need to reexamine mandates that banks should lend without collateral to certain segments.
On the one hand, slowing growth with a downside risk, and the widening output gap should signal the need for further monetary accommodation, given the absence of significant demand pressures in the economy. These conditions have already resulted in the Bank being more tolerant of inflation at the upper end of the target range than would normally have been the case.