In addition to preventing monetization at all costs, it is essential to avoid even the emergence of mere doubt in financial markets as to whether the Bank’s action could be considered monetization.
Auto lending also has reportedly been solid, reflecting strong fundamentals in auto markets – such as robust demand for used cars and relatively low delinquency rates on existing auto loans. The strong fundamentals for auto loans in turn also appear to have contributed to an easing of lending standards and terms. But, as I mentioned earlier, residential mortgage lending has been particularly sluggish.