Net borrowings by Spanish banks from the European Central Bank rose in August to 388.7 billion euros ($506.4 billion), underlining funding stresses as deposits fall and access to debt markets stays restricted.
Net average ECB borrowing climbed from 375.5 billion euros in July and 69.9 billion euros in August 2011, the Bank of Spain said on its website today. Gross borrowing was 411.7 billion euros, up from 402.2 billion euros in July.
A decline in bank deposits is adding to funding pressures for Spanish banks, of which only the strongest have any access to wholesale debt markets, said Juan Pablo Lopez, an analyst at Espirito Santo Investment Bank in Madrid. Deposits by non-financial companies and households dipped 26 billion euros in July from June, according to data from the Bank of Spain.
“Deposits are falling and the deleveraging process is still getting going for some banks,” Lopez said. “The only option is the ECB.”