a high probability of selecting the most risky counterpart. 7  For a few examples, see e.g. Quagliariello (2006, 2007); Jimenez, Ongena, Peydro and Saurina (2007); Jimenez and Saurina (2005); and De Graeve, Kick and Koetter (2008). 8  See General Documentation attached to the Guideline of the ECB on monetary policy instruments and procedures of the Eurosystem (available at www.ecb.europa.eu).
4  BIS Review 77/2008  On top of that, the traditional group of investors, suppliers of liquidity for the banking sector, have altered their investment strategies. There is some evidence that money market funds and central banks (in the management of their foreign reserves) have shifted their investments from the banking system to safe-haven assets like Treasury bills or overnight repo transactions.