They have therefore had to rely on the ECB for their liquidity needs. The ensuing increase in the overall amount of liquidity available in the system has led to a fall in the overnight rate on unsecured borrowing– the refinancing rate for banks perceived as safe.
The average overnight rate, or EONIA rate, has hovered around levels very close to the rate on the deposit facility over the past four years. It currently stands below 10 basis points. At the same time, returns on long-term safe assets have never been so low since the creation of Economic and Monetary Union.