Reflecting credit institutions’ reluctance to lend to one another, the risk premium between three-month Euribor and the Overnight Index Swap (OIS) climbed signifi- cantly from the first signs of money market disruptions in summer 2007. It subsequently moved in line with the intensity of the turbulences, before peaking in early October 2008. Since then, despite the fact that the ECB has no direct control over the money market beyond the immediate term, the rate cuts that it orchestrated and the various steps that it took to provide liquidity made it possible to considerably lower the three-month risk-free rate and the three-month.
