I do think the ECB minds that the interbank rate collapsed to the support rate. It's just that they like their huge bid-ask spread, so they can't narrow the band. Cue a digression about cutesy rules of thumb and the possibly excessive remuneration of European central bankers.

Of course, if they did narrow the band, they would probably want to drop the MRO rate towards where the support rate currently is, because narrowing the band around the current MRO rate would put them above the zero bound.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.