Following the changeover to the euro, a highly competitive single money market has already emerged in the euro area as banks were well prepared for the changeover to the euro and the TARGET system has provided an efficient means of making cross-border payments.
Also, the actual cash rate has moved to be below the cash rate target, driven by those parts of the package that are contributing to a rise in liquidity and funding provided to the banks. [4] I'll turn to each of these elements as I discuss the balance sheet tools we have been using.