Standing facilities are monetary policy operations through which national central banks enable eligible counterparties to borrow and deposit funds at their own initiative at the end of the day with overnight maturity.
Eligible counterparties can use the marginal lending facility to obtain overnight liquidity against the provision of eligible collateral at the interest rate above the overnight interest rate in the money market.
Eligible counterparties can use the deposit facility to make deposits with the national central banks. The interest rate on the overnight deposit is normally below the interest rate in the money market.
The interest rates on the marginal lending facility and deposit facility provide the floor and the ceiling for the interest spread within which the interest rates in the money market would normally move.