Banks return to central bank funding

05 Oct 2010

Banks refinanced Eu197bn in the ECB’s weekly tender operation on Tuesday — more than expected given that only around Eu196bn matured. This suggests banks are making a move back towards ECB funding after last week taking up just Eu133bn of ECB funding as Eu225bn matured, causing funding rates to spike. Will this latest move to increase bank liquidity cause funding rates to normalize? Read EuroWeek this week to find out.

Tessa Wilkie +852 2842 6977

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