Spanish bank borrowing from ECB eases from record amounts

14th September 2010, Comments 0 comments

Spanish banks cut their borrowing from the European Central Bank in August after tapping the ECB for record amounts in the previous two months, Spain's central bank said Tuesday.

Borrowing by the country's banks during the month fell by 15.7 percent over the July figure to 109.8 billion euros (140.9 billion dollars), its first drop since April, figures published on the Bank of Spain's website showed.

But the amount was still up by 46.7 percent from the 74.8 billion euros borrowed by Spanish banks from the ECB in August 2009.

The decline in borrowing in August over the previous month was seen as a 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 Spain's banking sector as largely healthy.

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 amount borrowed by Spanish banks from the ECB in June and July was the highest amount since the Bank of Spain began publishing the figures when the eurozone was launched in 1999.

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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