Spanish banks' ECB borrowing surges: figures

14th December 2011, Comments 0 comments

Spanish banks owed sharply higher amounts of money to the European Central Bank in November, authorities said Wednesday, a sign Spain is struggling to borrow on financial markets.

The amount owed by Spanish banks to the European lender of last resort surged by 28.8 percent compared to October to 97.97 billion euros ($127.6 billion), Spain's central bank said in a statement.

This key measure of Spanish banks' ability to finance themselves via financial markets hit a peak in July 2010 then fell for months, indicating stronger investor confidence. It started rising again in September.

European Commission economists have warned that Spain risks falling back into recession next year after emerging in 2010 from one brought on by the bursting of a real estate bubble and the wider world economic crisis.

Investors have grown increasingly anxious in recent months that financial turbulence in heavily indebted Greece and Italy could spread to Spain, which is fighting to lower its public deficit.

In August, the European Central Bank relaunched its programme of buying the debt of eurozone countries including Spain second-hand on financial markets to reassure investors. It has resisted widespread calls to buy on a larger scale.

© 2011 AFP

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