Tuesday, December 27, 2011

ECB Overnight Deposits Reach New High

Wall Street Journal
December 27, 2011

Use of the European Central Bank's overnight deposit facility reached a new, all-time high Monday, as euro-zone banks parked a growing surfeit of market liquidity in the central bank's safe haven for deposits.

Banks deposited €411.81 billion overnight Monday, up from €346.99 billion deposited overnight Thursday ahead of the Christmas holiday, ECB data showed Tuesday.

Monday night's deposit figure surpasses the previous record of €384.3 billion reached in June 2010, ahead of a 12-month tender operation and concerns about the then-nascent debt crisis.

The high level reflects ongoing distrust in inter-bank lending markets, where banks prefer using the low-risk ECB facility for excess funds rather than lending them to other banks.


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