in european markets. in the paper by greenwood et al. ( 2016 ), rrp is considered a way to create very short - term safe assets. it would foster financial stability by avoiding the unsuccessful attempts by the private sector to fulfil that role, as we saw before the crisis. both arguments deserve careful consideration although they are, from a european perspective for the moment, less relevant or less urgent. in fact, the enduring predominantly bank - based nature of the european financial system allows us to consider the possibility of going back, once the situation is normalised, to lending to banks as the main channel for managing liquidity and steering short - term interest rates. nevertheless, the structural changes that i just mentioned are also growing in europe and we have to reflect on the possible limitations of monetary policy transmission by only influencing the very short end of money - market rates. better benchmark rates are needed, ideally relying on actual transaction data to improve their reliability and robustness. yet, moves to improve benchmarks suffer at present from the challenge of declining transaction volumes in the unsecured interbank market although the ongoing work points to a successful conclusion of the reform. the discussion of which interest rates to focus on is closely intertwined with the issue of central bank counterparties. the ecb has traditionally granted a broad range of financially sound credit institutions access to monetary policy operations. that approach enabled us to swiftly provide liquidity to various financial market segments during the crisis where more active central bank intermediation was warranted. nevertheless, non - banks are beginning to play a greater role in the european financial landscape, and are likely to take an even greater role as the capital markets union deepens and broadens financial markets in europe. such consideration is not neutral for market rates in the euro area. secured money market rates, backed by high quality collateral, have for a while been trading well below the ecb deposit facility rate, which normally sets a floor for short - term money market rates. in part, this discount is explained by non - banks ’ activities that – not having access to central bank facilities – are accepting interest rates below the deposit facility rate. the discount is, of course, also attributed to the asset purchase programme which has reduced the availability of high quality collateral at the same time as market demand for that collateral has increased. nonetheless, understanding these drivers is crucial for the central bank when making decisions about future counterparty eligibility and the choice of money market rates used to assess monetary policy transmission.

they are renouncing exactly that as a result of wage cuts across all sectors. but this is still easier to do inside the euro area rather than outside it. bild : is there a limit to the support? or will it just continue like this? draghi : i can ’ t answer that. we will have to see how things develop in the country. generally speaking, the fact remains that if we want to protect taxpayers ’ money, the euro area cannot be turned into a transfer union, where one or two countries provide the money, the rest spend, and the whole thing is financed by joint eurobonds. that cannot happen. bild : many parties, also in germany, are calling for that. draghi : a community must be founded on trust – trust that shared rules will be adhered to, for example, with regard to budgetary discipline. that is why the new fiscal pact among euro area states is the right thing and why eurobonds would be premature. bild : is the german chancellor ’ s stance winning through? draghi : let me put it this way : without pressure from the markets and from the germans, much of the progress we have made in the various euro area countries would not have been possible. bild : how often do you speak on the telephone with the chancellor? draghi : not very often. the ecb is very mindful of its independence. and the chancellor fully respects this. bis central bankers ’ speeches