CORRECTED: Spanish bank borrowing from ECB eases for second month

14th October 2010, Comments 0 comments

Spanish banks slashed their borrowing from the European Central Bank for the second month running in September, the Bank of Spain said on Thursday, in a further sign of renewed market confidence.

Borrowing by the country's banks during the month fell by 11.1 percent over the August figure to 97.7 billion euros (137.5 billion dollars), the central bank said.

But the amount was still up by 22.7 percent from that registered in September 2009.

The amount borrowed from the Frankfurt-based ECB fell in August this year for the first time since April. That came after Spanish banks tapped the ECB for record amounts in June and July.

The deputy chairman of the Bank of Spain, Javier Ariztegui, said in June that Spanish banks since April had been forced to seek more liquidity from the ECB due to nervousness in the markets over the country's economy.

The latest borrowing cut was viewed was a further sign that Spanish banks were finding it easier to meet their funding needs on the market following the release of stress tests at the end of July that showed the country's banking sector as largely healthy.

All eight major Spanish banks passed the EU's bank stress tests on their ability to weather a crisis although five out of 19 regional lenders failed.

© 2010 AFP

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