ABSTRACT
This chapter presents some stylized facts about the euro area money market and provides an assessment of its development and degree of integration since the introduction of the euro. Also in order to put the structures of the euro money market into perspective, we provide some international comparisons, primarily from the US money market. The chapter describes the broad set of monetary policy instruments and procedures applied by the ECB and discusses their role in shaping the money market. It presents evidence on the degree of integration in the open market operations of the ECB, which constitute the primary money market in the euro area. The transactions of the ECB are conducted as repurchase agreements or as collateralized loans. In both cases, reserves are provided against adequate collateral. The range of eligible collateral in the operations is very wide, including for example also private sector securities, to ensure an equally abundant collateral base for counterparties across euro area countries.
