complex structured products and the liquidity in this market under stressed conditions. let me point out three key weaknesses : • first, the ability of investors to assess the extent of concentrations among various types of collateral – including sub - prime – within the structured finance securities has clearly been shown to be less than adequate. indeed, conducting adequate due diligence regarding the nature of underlying investment exposures cannot be replaced by decision - making based almost exclusively on ratings. • second, market participants were not sufficiently alert to the possibility that liquidity could dry up in structured finance markets, even though secondary market liquidity in the various structured finance markets has been traditionally thin. as you know, there are several reasons for this, inter alia : the specificity of these instruments, which are often tailor - made ; the “ buy - and - hold ” strategies followed by a large number of investors ( including, pension funds, insurers, and banks ) ; and the limited comparability of mark - to - model valuations, stemming from the complexity of these instruments. • third, the asset backed commercial paper ( abcp ) structures had intrinsic liquidity risk because they invested the proceeds of short term liabilities into longer maturity structured finance assets. in some cases, certain types of abcp structures such as structured investment vehicles ( sivs ) faced increased pressure resulting from an inability to roll - over. this came both from investor anxiety concerning the underlying collateral and the inability to value adequately the collateral as they were forced to sell assets. there are indications that the liquidity strains associated to these structures are not yet over. three key weaknesses of credit markets whilst it is too early to make a definitive assessment, certain supervisory and regulatory issues can already be identified as warranting further attention or action. initiatives are already underway at the international and eu level to address these various issues, but for our exchange of views here today i would like to focus on three key issues : transparency, valuation of complex structured products, and liquidity risk management practices, including liquidity risk stress - testing. • first, transparency for markets, investors and regulators. adequate transparency is a necessary basis for an efficient functioning of financial markets. recent experience has shown how perceived opaqueness or uncertainty regarding the underlying exposures, in particular of financial institutions, has translated into a loss of confidence with a resulting disruption in the interbank market. there have been recently many calls for enhanced market transparency both from banks ( e. g. enhanced disclosure of banks ’ liquid

40 billion above the benchmark amount. in the following weekly operation on 16 october, the allotment exceeded the benchmark amount by eur 18 billion, and in yesterday ’ s tender we allotted more than eur 14 billion above the benchmark amount. indeed, the difference between the allotted and the benchmark amount is envisaged to decline gradually in the course of the maintenance period, taking into account the prevailing market conditions. and the ecb still aims at balanced liquidity conditions at the end of the maintenance period. besides, the ecb intends to steer liquidity towards more balanced conditions also during the maintenance period, in a way which is consistent with the objective to keep very short term rates close to the minimum bid rate. we have also stated our commitment to keep this policy in place for as long as needed. before turning to the current situation in the market, let me stress a very important point. through the liquidity operations just discussed, the ecb has contributed to the orderly functioning of the money market, which is one of its key responsibilities. it is worth emphasising, however, that the ecb ’ s primary mandate calls for its monetary policy to deliver price stability. the two responsibilities are clearly distinct and should not be mixed. this is our concept. only when kept separate, the fulfilment of both duties can reinforce each other. current situation let me now turn to the main issues that characterise the nature and dimension of the current tensions in some segments of the financial markets. the so - called benchmark amount is the amount of liquidity that is needed for the banking sector to fulfill their reserve requirements in a smooth fashion over the course of a maintenance period. usually, the ecb supplies roughly this amount in its weekly refinancing operations. although the ecb interventions have had a stabilising effect on the euro money market rates at the shorter end of the term structure and, more generally, the money market has recovered some of the lost ground, market participants continue to report limited trading activity, particularly in unsecured inter - bank term markets. compared to the situation prior to the emerging of tensions, unsecured deposit rates beyond one month are in some cases ( notably, three months ) still significantly higher and turnover remains lower, despite some improvement during the past few weeks. this situation reflects two main factors. • first, some banks ’ daily funding needs, especially in usd, have significantly increased at various points in time in the recent past