Tags: Emergency | Bank | Borrowing | ecb

ECB: Emergency Bank Borrowing Jumped to 7-Month High

Wednesday, 19 October 2011 11:30 AM EDT

The European Central Bank said financial institutions borrowed the most in emergency overnight cash in more than seven months.

Euro-area banks tapped the Frankfurt-based ECB for 4.8 billion euros ($6.6 billion) yesterday at 2.25 percent, up from 2.4 billion euros the day before and the most since March 1. Lenders parked 172 billion euros with the ECB at the 0.75 percent overnight deposit rate, up from 165 billion euros a day earlier, the central bank said today.

Banks are borrowing more from the ECB as the region’s debt crisis makes them reluctant to lend to each other and tightens money markets. The ECB this month said it will continue lending banks as much money as they need in its refinancing operations through June next year and reintroduce unlimited yearlong loans to ensure they have access to ample liquidity.

Overnight borrowing “has been very high for some time and in our view is related to probably some banks being moved to Emergency Liquidity Assistance from normal borrowing,” said Laurent Fransolet, head of European fixed-income strategy at Barclays Capital in London.

The ECB also said today it will lend $500 million to one euro-area bank in its regular weekly dollar tender. It doesn’t identify the banks it lends to.

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The European Central Bank said financial institutions borrowed the most in emergency overnight cash in more than seven months. Euro-area banks tapped the Frankfurt-based ECB for 4.8 billion euros ($6.6 billion) yesterday at 2.25 percent, up from 2.4 billion euros the day...
Emergency,Bank,Borrowing,ecb
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2011-30-19
Wednesday, 19 October 2011 11:30 AM
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