One key reason for lower market rates is the fact that spreads are lower in the euro area, a positive interpretation of which would point to somewhat lower credit and liquidity risk premia. Non-standard measures Let me now turn to the exceptional policy actions that we have taken in response to the crisis – the so-called “non-standard” measures.
As you will recall, when the very significant stress in interbank markets first manifested itself in August 2007, the ECB immediately stepped into the breach and accommodated the temporarily elevated liquidity demand from the banks through a fixed rate operation with full allotment, providing € billion to the market within a few hours.