ECB says banks to repay 61 bn euros in ultra-cheap loans

22nd February 2013, Comments 0 comments

The European Central Bank said on Friday that 356 eurozone banks will repay early 61.1 billion euros ($80.5 billion) of a second batch of ultra-cheap three-year loans made available to them a year ago in emergency liquidity measures.

Under the ECB's special long-term refinancing operations or LTROs, which it launched to avert a looming credit crunch in the single currency area, banks had the option of repaying any part of the money after just one year.

"Accordingly, on February 27 ... 61.1 billion will be repaid in the tender by 356 counterparties," the ECB said in a short statement.

The LTROs, injections of liquidity into the banking system with ultra-long maturities of three years, were launched in two batches -- 468 billion euros in December 2011 and 529 billion euros February 2012.

At the time, they were widely credited with pulling Europe back from the brink of a dangerous credit crunch.

Both rounds of LTRO included provisions to allow early repayment after one year, if banks so chose, with the first repayment window opening on January 30, and the second on February 27. After that, repayments can continue on a weekly basis, depending on demand.

At the first repayment of the first batch on January 30, 278 banks repaid 137 billion euros.

© 2013 AFP

0 Comments To This Article