7  In addition, research that analyzed developments after past pandemics shows that the natural rate of interest, which is an important factor to take into account when conducting monetary policy, has a tendency to decline for about 20 years after a pandemic and take about another two decades to return to the pre-pandemic level.6,7 Attention should be paid to the fact that, deflationary pressure may be put on the economy unless real interest rates are lowered in accordance with a decline in the natural rate of interest.
The success of this initiative will largely depend on the number of on-site supervisors the national authorities are willing to send. We have established a rotation scheme for members of our Joint Supervisory Teams. This too will help to spread a common culture. At the same time, it helps to avoid supervisory capture. We foster exchange between supervisors from across the euro area.