Together, these two rates form the so-called “corridor” for movements in short-term rates. However, the Governing Council considered the possibility that market participants may need some time to accustom themselves to the new environment for monetary policy.
To this end, it was decided to use a relatively narrow corridor of interest rates for the standing facilities of the Eurosystem in the first three weeks of Stage Three as an automatic device to reduce the maximum range of fluctuations in the overnight interest rate.