Both these settlements were a far cry from the hall-mark and touch-stone of an efficient, frictionless, seamlessly coupled, and organically connected, physically-settled futures market even where physical delivery typically does not exceed 1% to 3% of the peak Open Interest! This happened because of the inefficient “disconnect” and “friction” in the IRF market due to only one way arbitrage viz.
Once this monetary policy stance is decided, we have the responsibility to pave the way for the proper functioning of the money market. These two responsibilities are clearly separated and this has been well understood by market participants. - To solve the consequences of the subprime turmoil, did the ECB inject more liquidity than the US monetary authorities?