transactions accounted for 60 % of all unsecured overnight interbank lending. right after the bankruptcy, this proportion dropped to 50 %. a fall in the cross - border flow of liquidity indicates a fragmentation of the euro area money market along national borders and threatens the implementation of a common monetary policy throughout the euro area. the ecb reacted and succeeded in calming markets, including money markets, first by conducting two monetary policy operations with a three - year maturity, and then, most recently, by committing to remove redenomination risk in countries having signed to an esm assistance programme ( the so - called outright monetary transactions, omts for short ). for example, the share of the cross - border overnight transactions increased gradually from 30 % to 50 % following the omt announcement. the rise and fall of the euribor - ois spread, of the use of the ecb ’ s deposit facility and the proportion of cross - border transactions all indicate that banks are more risk - averse than they were before the financial crisis. money markets, especially unsecured ones, suffer from counterparty risk, that is, the fear of not being repaid. accordingly, driven by the desire to protect and ensure repayment, transactions in money markets have become both more short - term and secured. there is no official data on the overall size of the repo market in the euro area, although surveys are regularly conducted by icma and the ecb. according to the latest icma survey, the total value of repo contracts outstanding on the books of the 62 participating institutions was €5. 6 trillion in june 2012, down from €6. 2 trillion in december 2011. 6 the ecb ’ s money market study of see, for example, f. heider, m. hoerova and c. holthausen, “ liquidity hoarding and interbank market spreads : the role of counterparty risk ”, ecb working paper no 1126, 2009. see also b. cœure, “ the importance of money markets ”, speech delivered at the morgan stanley 16th annual global investment seminar, tourrettes, provence, 16 june 2012. injecting liquidity in the financial system increases the assets of the eurosystem, which leads to an equivalent increase in liabilities, in this case in the form of more deposits from banks. a similar cessation of interbank lending after the lehman bankruptcy has been documented in the united states. see g

is associated relates to triparty settlement interoperability. 15 when we refer to this, we should keep in mind that an important feature of the european repo market set - up is the ( increasing ) integration between the repo clearing, settlement and collateral management layers. while there is an increasing integration across these layers however, there remains in some cases a certain fragmentation that limits traders ’ opportunities based on the location of the collateral. working in close cooperation with the european repo council ( erc ), the international central securities depositories ( icsds ) have started to develop a triparty settlement interoperability model to support settlement of general collateral trading cleared by ccps. with the interoperability between the two icsds ’ collateral management systems, market participants would avoid the fragmentation of their liquidity pools. the ecb is fully behind this market - led triparty interoperability initiative because of its collateral pooling benefits and efficiencies. moreover, it reduces the costs for triparty repos related to collateral management, settlement and legal charges, and allows trading to be executed regardless of the location of the collateral. non - discriminatory, risk - based access to and by market infrastructures is an important element of the new international regulatory framework. with market participants increasingly moving to central clearing, the business triparty interoperability is especially relevant for standard interbank operations / repos, which are cleared at ccps and where ccps use standardised baskets of eligible collateral ( also referred to as general collateral ( gc ) baskets ). bis central bankers ’ speeches case for triparty interoperability is growing. furthermore, the new cpss - iosco principles for financial market infrastructures were specifically strengthened to facilitate access and interaction between such infrastructures. some of the key parties involved in this triparty settlement interoperability initiative have started to show signs of retreating in past months. while the ecb understands the complexity of establishing a triparty interoperability model and the substantial efforts and in particular the investment costs required to make it work, it would like to strongly urge all parties to continue to work together. interoperability will bring important benefits – by allowing a more efficient use of collateral by bringing together separate pools of liquidity. the ecb remains ready to continue to support the triparty settlement interoperability initiative and to help bring the project forward. concluding remarks let me conclude. the resilience and proper functioning of market infrastructures is of paramount importance