German banks 'reducing reliance on ECB funds'

19 February 2013

German banks markedly reduced their reliance on funding from the European Central Bank (ECB) last month, new data has shown.

Figures published yesterday (18 February) by the Bundesbank revealed that financiers in Europe's foremost economic power owed the central institution €49.5 billion ($66.1 billion) at the end of January, Reuters reports.

This represents a significant drop of €23.6 billion on the figure recorded one month previously as an increased number of lenders opted to take advantage of the chance to repay their loans early.

Around 12 months ago, the ECB offered ailing banks in the 17-member state bloc the opportunity to take on three-year lending arrangements at favourable interest rates in an attempt to prevent struggling companies from needing full sovereign bailouts.

These so-called Long-term Refinancing Operations proved massively popular, with hundreds of financiers across the eurozone taking on a collective figure in excess of €1 trillion.

However, the ECB is now allowing these firms to reimburse it early - an offer German banks are seemingly eager to make the most of.

By Tony Aynsley

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