This amount has increased from around EUR 600 billions in the first half of 2007 to around EUR 800 billions. The increase in over-collateralization during the turmoil might reflect a natural preference of banks to expand their liquidity buffers – in order to get maximum access to intraday liquidity and to the marginal lending facility in case of need.
In addition to this, banks have had to collateralise temporarily higher amounts of outstanding Eurosystem credit because of the frontloading policy. Finally, regulatory incentives might have played a role, as regulators may have allowed banks to apply better liquidity ratios to assets held with the Eurosystem.