But this does not mean that the liquidity remained idle: rather, it was re-deposited by different banks from those that had originally received it, after circulating among banks in different euro-area countries and taking the place of private capital flows where these had been interrupted.
It preserved the orderly operation of the markets, kept yields down, and prevented the fall in fundraising from triggering a ruinous credit crunch for households and firms. In the last twelve months Italian banks’ loans to the private sector have increased by 1.3 per cent.