The package has two other elements: about $950 billion in loan guarantees from the European Union, and a decision by the European Central Bank to intervene in the bond markets through a series of refinancing operations.
The European Central Bank's long-term refinancing operation of lending to banks helped spur demand.
This liquidity has been provided by a series of vast refinancing operations, where commercial banks park assets of varying quality with the E.C.B. in exchange for cash at a low rate.
This liquidity has been provided by a series of vast refinancing operations, where commercial banks park assets of varying quality with the European Central Bank in exchange for cash at a low rate.
The outstanding amount of its refinancing operations had declined recently, he noted, which "has been interpreted by the market, rightly so, I would say, as evidence of normalization".
The market-oriented approach promoted by the European Central Bank in the design of its refinancing operations creates incentives to credit institutions to use actively the interbank market to manage their liquidity needs.
Market tensions began easing late last year after the European Central Bank drove down funding costs to the Continent's ailing financial institutions with the introduction of longer-term refinancing operations, which gave banks the option of borrowing as much as they wanted at the benchmark interest rate of 1 percent against collateral.
The reported evidence points to time-varying liquidity adjustments and identifies liquidity, market activity and the institutional setting of the ECB's refinancing operations as significant determinants of the observed resiliency regimes.
Still, he said, by the time the next round of the E.C.B. refinancing operations goes through, in late February, "banks will have a lot of liquidity".
Also, we noted the emergence of "longer term refinancing operations" (LTRO) as a highly ranked connective (G) concept and similarly the increase in betweenness for "main refinancing operations" (MRO).
According to the Bank of Greece, Greek banks had borrowed €86.8 billion from the E.C.B. via so-called refinancing operations as of the end of April.
