In the variable rate tender procedure – as introduced in the Eurosystem since 2000 – the fact that the bids submitted by banks in aggregate fall short of the allotment amount provided by the ECB. As a result, banks run the risk of having insufficient liquidity at the end of the reserve maintenance period. In this case, they will have to draw on the ECB’s marginal lending facility. This, however, pushes up the overnight rate. – See tender, excess liquidity, variable rate tender, allotment procedure, American.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/

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