Spanish bank borrowing from ECB drops in January

14th February 2011, Comments 0 comments

Spanish banks slashed their borrowing from the European Central Bank in January, the Bank of Spain said Monday, in a sign of renewed market confidence in their financial health.

Borrowing from the ECB by the country's banks during the month fell 31 percent from January 2010 to 53.1 billion euros ($71.5 billion). The figure was down 20 percent from December 2010.

The amount borrowed from the Frankfurt-based ECB fell in August this year for the first time since April. That trend continued in September, October and November but the figure rose slightly in December.

The declines came after Spanish banks tapped the ECB for record amounts in June and July as the country came under pressure on the markets in the fallout from the Greek debt crisis.

Spanish banks currently account for about 15 percent of the total amount loaned by the ECB in the eurozone, compared to 30 percent in June and July.

The latest borrowing cut was viewed was a further sign that Spanish banks were finding it easier to meet their funding needs on the markets.

Spain is struggling to emerge from an economic crisis that began in late 2008 and to convince nervous markets it will not require a Greek- or Irish-style bailout.

© 2011 AFP

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