Record cash deposits received by ECB

28 December 2011

The European Central Bank (ECB) has been handed record levels of cash deposits from lenders across Europe.

According to the organisation, it has received €412 billion (£344 billion) - beating the previous highest total of €384 billon, which was set in June 2010.

Such movement suggests banks throughout the continent are becoming increasingly nervous with regard to lending to one another and arrived after money was lent to the institutes by the ECB - whose main goal is to preserve the purchasing power of the euro - to help prevent another banking crisis last week.

Around €200 million of the €489 billion of the new three-year loans were used by banks to repay the debts they already owed, with the remainder being placed into cash accounts, such as the deposit setup.

These handouts were issued just before Christmas and were paid out in an attempt to settle the financial markets as the festive season got into full swing.

By Claire Archer

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