In return, the Fed pays the institution the overnight reverse repurchase rate.14 Even though this transaction seems complicated, it is similar to banks depositing reserves at the Fed and receiving interest on them.
Consider the reforms in France under President Emmanuel Macron. Such reforms are certainly more convincing for markets than merely making proposals on creating a European “debt union”. Concerning NPLs, the ECB’s banking supervisors want to be stricter, but are encountering a lot of political opposition within the EU. Are the euro area countries unwilling after all to address the problems of their banks?