Through the standing facilities the Eurosystem manages and restricts volatility in the overnight money market interest rates. Standing facilities are available to banks on their own initiative.
In normal circumstances the standing facility rates set the ceiling and floor for interest rates on the unsecured overnight interbank money market.
The Eurosystem offers two standing facilities:
- the marginal lending facility is used to obtain overnight liquidity from the central bank against eligible collateral;
- the deposit facility is used to place overnight deposits with the central bank.