Let’s first go back to the early days of May 2010. What we witnessed those days, was a fullblown panic on financial markets after tensions on some government debt markets had been mounting since the fall of 2009 as investors increasingly cast doubts on the capacity of Greece to repay its public debts.
BIS Review 111/2010  7  It must be noted that on top of this, there has been some autonomous tightening of 150 basis points because of the tightened liquidity and the consequent shift of the operative policy rate from the bottom of the LAF corridor (absorption mode) to the top of the corridor (injection mode). 43.