8 In our case, we saw that transaction volumes in the short term (EONIA) money market increased and EONIA rates were only moderately affected [slide 4: EONIA rate/trading volume] when the amount of excess liquidity decreased after the expiration of the first (very large, € bn) 12 month LTRO, indicating that the very generous liquidity provision through the central bank might have had a dampening effect on market activity when confidence between banks re-emerged.
Some of the very same measures that contributed to stabilizing the economy might unfold negative effects and become destabilizing if policy accommodation is not withdrawn in time. This is particularly true against the background of a recovery gaining momentum, increasing inflation pressures coming from commodity prices and improvement in financial market conditions, given the protracted and global character of the current monetary policy accommodation.