Euro-area banks decreased three-month borrowing at the European Central Bank even as they prepare to repay longer-term emergency loans.
Financial institutions took 3.7 billion euros ($5 billion) in the ECB’s three-month refinancing operation, less than the 6.2 billion euros that expire tomorrow. Interest is linked to the average ECB benchmark rate, currently at 0.75 percent, over the period of the loan.
A total of 278 financial institutions are returning 137.2 billion euros in three-year loans today, the first opportunity for early repayment of the initial longer-term refinancing operation announced in 2011 when Europe faced a credit crunch. Short-term borrowing from the ECB remained virtually unchanged yesterday, when banks took 124.1 billion euros in seven-day funds.