I’m not against kink-rate model at all, i was referring to original rates, rather than model itself, though we are speaking about quite abstract thing here. Utilization never reached even 50% in normal market situation, so what rate is going to do after 80% utilization does not really matter much.
Especially if sentiment is in leaving CAP intact, which will surely prevent utilization from ever reaching right end of curve at all. And please, don’t provide me with argument that multisig can adjust. It is very well known that multisig wouldn’t. It’s always slow to react, and it would never want to take responsibility in raising cap at higher than 80% utilization, so anybody can take it to the bank, that it’s never going to happen as long as borrow cap would be in place Thus rates for that section only matter when there is no cap on borrowing and we just doing theory crafting here.
But if we are talking about long-term solutions, than kink-rate model isn’t that great either. I would rather want to see 2 kink points to split rate curve in 3 sections, rather than 2. To have stimulative rate section, where utilisation rates are low, normalised portion, where utilization is somewhere in 20-70 percent utilization range, and restrictive, where utilization is high, with over 70% utilization.