In terms of economic theory, one could say that information asymmetries had become too large, with the result of a market breakdown. And economic theory also tells us that a market breakdown is justification for public sector intervention. Two of the main functions of interbank money markets are the intermediation of liquidity shocks and the provision of short term funding for financial institutions.
In other words, the financial sector cannot work without these markets, cannot fulfil its role of supplying the economy with credit. Consequently, in the case of the euro area, these functions had to be taken over by the ECB. To achieve this, a number of actions were taken. The ECB switched to fixed-rate tenders with full allotment in all liquidity-providing operations in October 2008.