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Regarding European Interbank Money Markets, at the beginning of each month, when the ECB performs LTRO operations, whereby it lends for a 3-month period, shouldn't the 3-m Euribor exactly match the refi rate?

If the Euribor is higher, no bank will have the incentive to borrow on the IBMM. If the Euribor is lower, no bank will lend there and will prefer to renew lower loan amounts from the ECB to get rid of excess reserves.

What am I not getting?

Similar regarding the ESTER and the Standing Facilities. Shouldn't the ESTER always be between, the Margin Lending Facility and the Deposit Facility? As of 03rd April 2023, it is below 3%.

Thank you.

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    $\begingroup$ Euribor is an unsecured rate, while you need to provide collateral to obtain funding through LTRO, so the two are not exactly comparable. LTRO maturities are also often longer. Roughly though you could think of ECB funding rates as setting a ceiling for the private funding market. $\endgroup$
    – fes
    Apr 4 at 9:31

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