I already mentioned the smooth transmission of rates and the stable trading volume in EONIA. Similarly, the level of excess liquidity or the amount of deposits with the ECB (Slide 8) has been largely unaffected. However, one possible reason for the stable level of the money market function could be the declining, but still existing fragmentation of the money markets.
While a lot has been achieved, for example TARGET2 imbalances have fallen by nearly half since their peak in mid-2012 (at € 572bn on 3 September, € 541bn below their peak level reached in July 2012), market fragmentation in the euro area is still present.14 If banks with excess reserves are predominately highly profitable banks located in non-stressed countries, then a potential adverse effect on bank profitability may be less of a concern from the financial stability perspective.