Our small size may have actually be an advantage, in that it has been relatively easier to innovate when a small number of similar institutions are involved. In addition to improving customer services, some of the innovations I have talked about have been motivated by the need to reduce risks, and I will return to that topic.
The mechanism through which a change in the policy rate influences the development of prices and the real economy – the so called transmission mechanism – was seen as exogenous from the central bank’s point of view. This is in fact a sensible approach to microprudential regulation, which is concerned with the health of individual institutions.