##coins ” do not come exclusively from flows out of deposits in those same banking sectors. european central bank directorate general communications sonnemannstrasse 20, 60314 frankfurt am main, germany tel. : + 49 69 1344 7455, e - mail : media @ ecb. europa. eu website : www. ecb. europa. eu reproduction is permitted provided that the source is acknowledged. media contacts related topics https : / / www. ecb. europa. eu / press / key / date / 2019 / html / ecb. sp190917 ~ 9b6... 18. 09. 2019 digital challenges to the international monetary and financial system digitalisation crypto - assets financial markets international relations money page 8 of 8 currencies disclaimer please note that related topic tags are currently available for speeches and introductory statements to the press conferences ( with q & a ) from 2018 - 19 only. copyright 2019, european central bank https : / / www. ecb. europa. eu / press / key / date / 2019 / html / ecb. sp190917 ~ 9b6... 18. 09. 2019

much more severe than the impact our measures are said to have. 2. the impact of regulation alongside monetary policy, the new regulatory environment is a second key policy parameter affecting market functioning. the most prominent regulations cited by dealers as having had an impact on market liquidity are the leverage ratio, the liquidity coverage ratio ( lcr ), the net stable funding ratio ( nsfr ), as well as structural bank reforms ( e. g. the volcker rule ). while it is difficult to definitively identify a causal link – some observers note that banks and dealers are in the process of re - allocating business between risk - weighted asset and leverage ratio constrained lines of business – there are some reasons to suggest that market behaviour is consistent with the dealer behaviour mainly being constrained by the leverage ratio. the implied reduction of balance sheet available to trading desks, however, does not have a straightforward effect on liquidity. instead of a general widening of bid - offer spreads, which would be consistent with a general drop of liquidity, the reduction of available balance sheet has had two salient features in recent years. first, liquidity has been rationed to a larger degree in the sense that dealers have had to deploy their balance sheet selectively towards the most profitable businesses. second, liquidity itself has become more volatile and unevenly distributed across market segments, leading to greater market segmentation. in particular, it is now more difficult for dealers to use cross - market positions to bridge liquidity across the sub - segments of the euro area bond market, because it is more expensive to carry spread positions. volumes in the bond futures market provide a good example. before the crisis, only three german government bond contracts on eurex were reasonably liquid and the bellwether 10 year bund contract saw trading of around one million contracts a day. today, daily trading volumes in that contract have fallen to around 600, 000, while around 100, 000 10 year btp contracts and 80, 000 10 year oat contracts trade every day. neither of these bis central bankers ’ speeches contracts even existed before the crisis. bearing in mind that the locus of trading has shifted from cash bonds towards futures, these volume developments show that trading activity has decreased overall at the same time as it has splintered across markets. to give another example of this trend, we can recently observe that it has become more expensive to borrow certain securities, such as those issued by the german government, over the quarterly balance sheet closing dates