FRANKFURT, Jan 28 (Reuters) - Euribor bank-to-bank lending

rates jumped on Monday after banks decided to repay early more

than expected of crisis loans they took from the European

Central Bank just over a year ago.

The ECB said on Friday that 278 banks would return a total

137.2 billion euros ($183 billion) of the three-year loans they

took in December 2011, making use of the earliest repayment

opportunity on Jan. 30.

A Reuters poll had forecast a return of 100 billion euros.

The larger-than-expected repayment is a sign that at least

parts of the financial system are returning to health.

Banks took more than 1 trillion euros of ultra-cheap,

three-year loans, or Long-Term Refinancing Operations, from the

ECB in two separate offers roughly a year ago. The ECB used

these LTROs to try to restore order to Europe's crisis-hit

financial system.

Banks can repay the money early on a voluntary basis weekly

from now on and while the heavy oversupply of ECB cash has long

depressed the rates banks charge each other on lending markets,

a significant repayment could drive rates higher.

Reuters calculations show there is currently around 581

billion euros of excess liquidity sitting in euro

zone banks.

On Friday, three-month Euribor rates,

traditionally the main gauge of unsecured bank-to-bank lending,

rose to 0.224 percent from 0.214 percent.

The six-month rate rose to 0.370 percent from 0.356 percent

while the one-week rate inched higher to 0.082

percent from 0.081 percent. The overnight Eonia rate

rose to 0.071 percent from 0.068 percent.

Dollar-priced bank-to-bank Euribor lending rates were lower, with three-month rates

falling to 0.48455 percent from 0.49000 percent and one-week

rates dropping to 0.32909 percent from 0.33364 percent.

Euribor rates are fixed daily by the Banking Federation of

the European Union (FBE) shortly after 0900 GMT.

* For a table of the latest Euribor fixings for terms of one

week to one year, double click on

* For a table of the previous day's fixings of EONIA swap

rates, which show market expectations for future overnight

lending rates, double click on

* For graphs of historic Euribor and EONIA swap rates, right

click on the links in angle brackets below, and select 'Related

Graph'

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(Reporting by Frankfurt newsroom)

Keywords: MARKETS EURIBOR/

(frankfurt.newsroom@reuters.com)(+49 69 7565 1209)

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