This principle is important in order to reduce the risk that economic agents may mistakenly interpret volatility in short-term money market rates, triggered by temporary and unpredictable fluctuations in liquidity conditions, as containing information on the desired monetary policy stance (which is instead given by the rate applied to the main refinancing operations).
The separation principle has proved to be particularly effective during the financial market turmoil and at times of high volatility in the short-term money market rates. (i)  Addressing liquidity risk through increased intermediation  Let me now try to explain in somewhat greater detail the rationale behind the operational measures of the Eurosystem during the financial market turmoil.