Increased withdrawals of interbank deposits exceeded the money center banks' ability to meet demand, and payments were suspended to other banks. The scramble for funds spilled over into the money markets, where rates on call loans to brokerage houses, considered at the time to be very liquid investments, soared to extreme levels. Sound familiar?
While accepting that more could, and should, be done to improve adjustment mechanisms, given that a significant number of countries still exhibit major product and labour market rigidities, it is my belief that the euro is helping individual countries to undertake reforms that are leading to an increasingly efficient currency area.