The European Central Bank received more demand Tuesday for one-week
credit than last week, indicating the effect of the ECB's three-year
loans to banks has waned and that tensions in euro-zone money markets
may be intensifying.
The ECB allotted EUR167.253 billion ($210.94 billion) in seven-day
funds at a fixed rate of 1.00%, up from EUR131.747 billion at last
week's refinancing operation, which was also up from the previous
week. The number of bidders was 101, up from 94 a week earlier.
Demand for the weekly loans plummeted after banks tapped the ECB for
just over a trillion euros in three-year loans at the end of 2011 and
in February 2012. The weekly volume has increased, however, in recent
weeks as the effect of the three-year loans has worn off and tensions
surrounding Spain and Greece have spooked markets.
Monday's allotment far exceeded the ECB's benchmark allotment of
-EUR735 billion, its estimate of banks' liquidity needs to conduct
routine operations. The negative number means that banks have more
liquidity than they need.
Write to Todd Buell at todd.buell@dowjones.com
(END) Dow Jones Newswires
June 19, 2012 05:31 ET (09:31 GMT)
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