FRANKFURT, March 23 Euro zone banks took up more
ultra cheap long-term cash from the European Central Bank than
expected on Thursday, tapping into the last auction of an
unconventional tool designed to revive the bloc's economy.
Some 474 banks took up 233.5 billion euros of four-year
loans in the last targeted longer-term refinancing operation
(TLTRO), well above the 125 billion euros expected in a Reuters
poll, suggesting that banks are keen to stock up on cheap cash
in anticipation of a continued rise in lending.
Unveiled a year ago when lending growth hovered near zero,
TLTRO provides banks with interest-free funding and even a
possibility for a rebate if they lend the cash to the real
But corporate lending growth is at its highest since 2009
and economic growth is relatively robust, so the ECB decided
last month not to extend the TLTRO scheme, a move seen by some
as small step towards policy normalization.
Indeed, the ECB will cut month asset buys, also a tool to
lower funding costs to revive growth, to 60 billion euros per
month from 80 billion euros from April.
Even with the end of the four-year TLTRO, banks will
continue to have access to weekly loans from the ECB at a zero
percent interest rate.
(Reporting by Andreas Framke; Editing by Francesco Canepa)