A Greekmade euro coin is shown on a pile of euro cents this month. The European Central Bank said on Wednesday it made available 529.53 billion euros ($712 billion) to eurozone banks via its second three-year refinancing operation.
FRANKFURT (AFP) – Eurozone banks tapped the European Central Bank for a record 529.53 billion euros ($712 billion) in a second three-year auction of cheap liquidity on Wednesday, the ECB said.
A total 800 banks lined up to borrow new cash at exceptionally low interest rates in the central bank’s second three-year long-term refinancing operation — or LTRO — after already borrowing 489.19 billion euros in a first such operation in December.
The volume, and the number of banks, was way above analysts’ expectations.
The ECB launched the ultra-long loans back in December with the aim of averting a credit squeeze in the 17 countries which share the euro, hoping that the money will be lent to households and businesses.
There are also suggestions that banks could use part of the funds to buy sovereign bonds from countries in eurozone’s periphery. But the higher-than-expected take-up could be a sign that banks expect funding stress to continue, analysts said.
AFP
