s marginal lending facility and deposit facility rates and were concentrated around our main policy refinancing rate. 6 / 14 bis central bankers'speeches this relationship did not fundamentally change in 2007 with the emergence of the financial crisis. but when we granted unlimited liquidity to our counterparties against sound collateral, and when we later started purchasing assets, an environment of excess reserves caused unsecured money market rates to converge towards the deposit facility rate. you can see this on my next slide. whenever excess liquidity is large, the spread between the eonia and the deposit facility rate narrows, as the latter is the rate that determines the marginal cost of interbank lending when there is excess supply of central bank reserves. this was fully in line with our policy intentions. our policy framework was able to provide a hard floor, at our desired level, for the eonia. 7 / 14 bis central bankers'speeches at the same time, the transmission of our policy intentions started to become less uniform as excess liquidity mounted. you can see this on my next slide. in the past, different short - term rates, such as unsecured money market rates or repo rates backed by either general or security - specific collateral, on average moved in tandem and the spread between them was typically very small and rather stable over time. 8 / 14 bis central bankers'speeches but as excess liquidity increased, these rates started to diverge. as you can see from the chart, most money market rates have remained below the ecb ’ s deposit facility rate, sometimes by a substantial margin. some of these divergences are transitory and have no broader implications for monetary policy. regulatory “ window - dressing ”, for example, causes repo rates to decline on balance sheet reporting dates, but they typically bounce back quickly. you can see this clearly at year - ends, in particular in december 2016. other divergences, however, have proved more permanent and have sometimes been rising with the level of excess liquidity. the reason for this is that many of the ultimate holders of the securities we purchase under our asset purchase programme are either non - banks – typically, asset managers, pension funds, insurance companies or corporate treasurers – or banks located outside the euro area. and although central bank asset purchases in effect replace one safe asset with another – central bank reserves with government bonds – differences in who can hold these assets may result in persistent price effects. in other words, while the deposit facility rate provides an

constancio : well, we are not predicting what the governing council will do. we are not trying to do that. this is the assessment that we have been producing also as a result of monetary policy meetings of the governing council itself, like the more recent one we had. so it ’ s going along the same lines. personally, i don ’ t see anything in the speech that would be different from, say, the previous two main interventions about monetary policy done by the president. let us talk about one area of optimism, and that ’ s the political tailwind. how confident are you about the state of the political european landscape now? is there more of a momentum for reforms now? constancio : crises are always bad for the social and political mood, and recoveries are always good. and so there is a bit of a recovery, which is becoming stronger, and that, of course, has had its effects, in the mood of societies, of public opinion, and also in the political sphere. that ’ s what i think the president indicated, and indeed, there were fears, especially from outsiders, that some of the political developments in some european countries would go in the direction of creating some doubts, which were dispelled. so that ’ s what he refers to. but throughout all this period there is one thing that is important to recall : if you go to the eurobarometer that is the result of surveys in all member states, you see throughout all these years, all these years, that the support for the euro – being in favour of the single currency, the euro – has been stable at around 70 % of europeans in the euro area countries ; and that in all countries there was a majority supporting the euro. a majority in all countries. the numbers are different according to the different countries, but in all they are the majority. so this has been the support that the project has benefited from, and the present recovery has indeed reinforced those views. but we are talking about reforms as well. we ’ re talking about the banking sector : the european banking sector is not as strong as it should be. just over the weekend we have seen two italian banks getting state aid, so it was hugely criticised. why did they get that exception, that they ’ re allowed to have state aid? constancio : it is not an exception. everything is foreseen in the laws. brrd, the directive on resolution of banks, was not applied because