By Margit Feher
FRANKFURT--Banks' use of the European Central Bank's overnight
facilities rose slightly Tuesday while their current account levels
fell from the previous day.
Banks deposited 316.658 billion euros ($392.87 billion) with the ECB
Tuesday, up from Monday's EUR311.71 billion. Banks borrowed,
meanwhile, EUR1.079 billion from the ECB Tuesday, also up, from
EUR1.014 billion Monday, data released by the central bank Wednesday
showed.
Overnight deposits at the ECB ballooned since the ECB flooded the
markets with more than EUR1 trillion in cheap, three-year loans late
last year and earlier this year. But deposits fell sharply after the
ECB cut its deposit rate to 0% in July.
Meanwhile, banks kept EUR537.552 billion in their current accounts
Tuesday, down from the EUR541.65 billion Monday. Banks normally keep
just over EUR100 billion in reserves on their current account, where
they accumulate no interest income. But with the ECB's deposit rate
now at 0%, it makes no difference whether banks keep their excess
funds in the overnight deposit facility--where they are tied up for a
day--or in the current account, where they are available intra-day.
The ECB pays a 0% interest rate on the overnight deposits while it
charges a punitive 1.50% interest rate on the emergency borrowing,
compared with its benchmark one-week lending rate of 0.75%.
Write to Margit Feher at margit.feher@dowjones.com
(END) Dow Jones Newswires
August 08, 2012 03:25 ET (07:25 GMT)
No comments:
Post a Comment