A shared currency undoubtedly brings a number of economic benefits to the euro-zone countries. The main benefit comes from eliminating the costs of conversion from one currency to another in the 11 member countries. Thus, the flow of goods, services, and capital across national borders is no longer complicated by the use of different currencies.
In principle, there are various reasons for assuming that a rise in policy rates would revive interbank market activity. First, very low levels of interest rates may drive financial intermediaries, such as the money market funds, out of the market. Second, institutions without access to the deposit facility have to place funds with Eurosystem counterparties at interest rates below the deposit facility rate.