One such difficulty was the overbidding problem that arose under the fixed tender MRO system. As you know, this was particularly disadvantageous to institutions like those in Ireland without recourse to large amounts of collateral.
The move to the variable rate system in mid-2000 virtually eliminated the problem of severe overbidding which in turn provided Irish counterparties with the scope to increase their share of funds considerably – which, in fact, they did. Subsequently the phenomenon of underbidding emerged as the market anticipated reductions in official interest rates.