FRANKFURT (Reuters) - Banks cut their intake of one-week European Central Bank funding by just under 15 billion euros on Tuesday, as they continued to readjust their borrowing needs having recently gorged themselves on the ECB’s first ever offering of three-year cash.
A total of 138 banks borrowed 130.6 billion euros at the ECB’s first 7-day funding operation of the year, down from 145 billion last week and the 170 billion taken before the central bank pumped almost half a trillion euros worth of three-year loans into the system late last month.
Over 520 banks took part in that operation, the first of two limit-free, three-year funding handouts to be held by the ECB.
The offerings are designed to bolster the finances of euro zone’s crisis-strained banks and have sparked a massive increase in the amount of cash in the financial system, much of which is now being hoarded by banks. (for data click)
The ECB will offer its second installment of ultra-long, three-year loans on February 29. Before then it will offer 1-month funding on January 17 and February14 and 3-month funding on January 25 as well as on February29 alongside the 3-year cash.
Reporting by Marc Jones; editing by Patrick Graham