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
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
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
(Reporting by Frankfurt newsroom)
Keywords: MARKETS EURIBOR/
(email@example.com)(+49 69 7565 1209)
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.