Euro Funding Costs Hit Record Low as Banks Hunt for Collateral
- Three-month Euribor extends drop to minus 0.583% on Wednesday
- Decline comes as banks tweak balance sheets before year-end
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A gauge of short-term funding costs in the euro area tumbled to a record low amid a cash glut that has exacerbated the hunt for collateral before year-end.
Three-month Euribor -- a benchmark based on the average rate that large banks in the region can theoretically borrow from one another -- fell by 1.1 basis points, the most since July 2020, to minus 0.583% on Wednesday.