October 25, 2013 / 10:12 AM / 6 years ago

Banks to repay 1.8 bln euros of ECB crisis loans

FRANKFURT, Oct 25 (Reuters) - Banks will return 1.756
billion euros ($2.42 billion) of crisis loans early to the
European Central Bank next week, the ECB said on Friday,
draining less liquidity out of the system than expected.     
    By repaying the ECB's crisis funds early, banks are reducing
the level of excess liquidity - cash beyond what
lenders need to cover their day-to-day operations - in the
system further, from a current 187 billion euros.
    A Reuters poll of euro money market traders had expected
banks to return 3 billion euros next week. 
    Short-term money market rates are seen rising closer to the
ECB's main refinancing rate, currently at 0.5 percent, once
excess liquidity in the system falls below a threshold estimated
to be in the range of 100 billion to 200 billion euros. 
    The ECB is monitoring this development carefully as higher
bank-to-bank borrowing costs could undermine the euro zone's
fragile recovery.
    The ECB flooded the market with more than 1 trillion euros
in two long-term refinancing operations (LTROs) in December 2011
and February 2012 to ease banks' funding strains. 
    The three-year loans from the ECB will mature in early 2015
and banks now have the option to repay them early. 
    They have already returned about a third of the money and
are making increasing use of the early repayment option ahead of
the ECB's asset quality review of the banks it will start to
supervise directly from late next year.   
    On Friday, the ECB said three banks would repay 1.445
billion euros from the first LTRO on Oct. 30, and four banks
will pay back 311 million euros from the second LTRO.
     
    Announcements on details of LTRO early repayments (bln euro)
    First LTRO (Dec. 2011)  Second LTRO (Feb. 2012) 
 
    Jan. 25, 2013     137.1591                                  
    
    Feb. 1, 2013        3.4840   
    Feb. 8, 2013        4.9925   
    Feb. 15, 2013       3.7900   
    Feb. 22, 2013       1.7440            61.092     
    March 1, 2013       4.1760             8.319     
    March 8, 2013       1.3360             2.894     
    March 15, 2013      0.385              6.432     
    March 22, 2013      1.565              0.371     
    March 28, 2013      3.845              3.160    
    April 5, 2013       4.092              3.972    
    April 12, 2013      6.555              4.238   
    April 19, 2013      8.874              2.068   
    April 26, 2013      1.661              0.615  
    May 3, 2013         0.008              0.608 
    May 10, 2013        1.205              5.152 
    May 17, 2013        1.020              0.104 
    May 24, 2013        6.208              1.915
    May 31, 2013        2.810              0.271
    June 7, 2013        2.800              0.130
    June 14, 2013       3.008              0.180
    June 21, 2013       5.030              0.208
    June 28, 2013       2.025           0.035
    July 5, 2013        0                  2.095
    July 12, 2013       0.513              0.702
    July 19, 2013       2.182              0.200
    July 26, 2013        1.064              0.451 
    Aug. 2, 2013        1.800              0.333
    Aug. 9, 2013        0.516              0.200
    Aug. 16, 2013       0.204              0.450
    Aug. 23, 2013       0.100              0.205
    Aug. 30, 2013       0.100              4.545
    Sept. 6, 2013       3.705              2.200
    Sept. 13, 2013      0.741              2.375
    Sept. 20, 2013      2.650              5.260
    Sept. 27, 2013      1.535              1.622
    Oct. 4, 2013        4.610              3.065
    Oct. 11, 2013       0.597              0.250
    Oct. 18, 2013       0.105           5.094
    Oct. 25, 2013       1.445              0.311
    ===============================================   
    Amount outstanding as of Oct. 24   
                      239.168            392.606

($1 = 0.7245 euros)

 (Reporting by Frankfurt newsroom)
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