And as long as money markets remain dysfunctional, it is crucial for the Eurosystem to continue to provide as much liquidity as needed in order to ease tensions in the impaired money markets, with a view to ensuring that access to liquidity of solvent banks is not disrupted, thereby also contributing to safeguarding financial stability.
However, this is not the ideal long-term solution in a market-oriented economy like the euro area. It may discourage the resumption of normal inter-bank trading activity. It also potentially implies increased financial risks for the Eurosystem (which are nevertheless taken care of through adequate risk control measures).