European Central Bank borrowing by Spanish banks jumped 16 percent to a record 263.5 billion euros ($339 billion) in April after lenders tapped emergency loans.
Net average ECB borrowing climbed from 227.6 billion euros in March this year and 42.2 billion euros in April 2011, the Bank of Spain said on its website today. Gross borrowing was 316.9 billion euros, little changed from March, and accounted for about 28 percent of ECB borrowing by all euro-region lenders in the month.
Spanish banks have used three-year emergency loans from the ECB to cover funding needs and buy the nation’s bonds as doubts about hidden losses on the their balance sheets drove up their financing costs and kept them locked out of wholesale debt markets. The government on May 11 ordered banks to make a further 30 billion euros of provisions to cover real estate losses in its latest bid to bolster confidence in the financial industry.
“The fact that the gross number was broadly flat reflects the fact that they’ve already flooded themselves with so much additional liquidity,” said Tobias Blattner, an economist at Daiwa Capital Markets in London in a phone interview.
Spanish 10-year bond yields climbed today to 6.2 percent, the highest level since December.