FRANKFURT, Jan 28 (Reuters) - Spanish and Italian banks reduced their government debt holdings in December, European Central Bank data showed on Monday even after sizable increases earlier this year.

Spanish banks cut 4.3 billion euros from their government bond holdings after a 4.4 billion increase in November. Their total sovereign holdings, adjusted by market value, fell to 256.5 billion euros.

Italian banks shed a net 13.5 billion euros of government bonds, with their total value falling to 356.7 billion euros.

Greek banks also reduced their government debt holdings, by 4.3 billion euros to 20.1 billion, while Portuguese banks cut their government debt exposure by 2.0 billion euros, the data showed.

The ECB data do not break down which countries' debt banks hold, but the figures give a good picture of how much of the 1 trillion euros the ECB has pumped into the market in twin 3-year liquidity operations is finding its way into the government bond market.

(Reporting by Sakari Suoninen) Keywords: ECB/SPAIN BONDS

(sakari.suoninen@thomsonreuters.com)(+49 69 7565 1267)(Reuters Messaging: sakari.suoninen.thomsonreuters.com@reuters.net)

COPYRIGHT

Copyright Thomson Reuters 2013. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.