In other words, we expect an increase in the velocity of circulation of cash reserves – another way to describe an acceleration in the portfolio rebalancing effect that is a key component in the transmission of asset purchases to the real economy.
Turning to the second track of our policy – the repair of the monetary policy transmission mechanism – the flow of data indicates that our credit easing measures taken last summer are improving the pass-through of our accommodative stance to the real economy. The nominal cost of bank borrowing for euro area NFCs has declined sharply, with some convergence across countries (see Chart 3).