French banks quadruple ECB borrowing in four months
French banks quadrupled the amount they borrow each month from the European Central bank between July and October, as they struggle to find US lenders, Banque de France figures revealed on Wednesday.
Under pressure amid the eurozone debt crisis, French lenders borrowed 22.3 billion euros ($30.0 billion) from the eurozone's joint central bank in July, 37.4 billion in August, 86.7 billion in September and 100.6 billion in October.
In comparison, German banks borrowed only 31.5 billion euros from the ECB in September and 40 billion in October.
Many French banks have international investment arms that need large sums of US dollars to finance their activity, but American lenders are increasingly reluctant to supply capital to at-risk eurozone economies.
According to the ratings agency Fitch, US funds have reduced their exposure to French banks by 69 percent since May, and the trend continues.
Meanwhile, the ECB has put in place a programme of six-month and one-year loans in euros, which has encouraged French banks to seek refinancing closer to home, analysts said.
In parallel, the proportion of ECB lending destined for France has increased from 7.6 percent in August to 15.3 percent in September, again according to Banque de France figures.
© 2011 AFP