Calculated de-risk

25 January 2013 By George Hay Follow @gfhay

EU banks have repaid over a quarter of the 489 bln euros of three-year central bank loans they took in 2011. The risk is weaker banks still hooked on cheap liquidity get stigmatised. But the stronger ones will benefit, and the euro zone has other options if the crisis reignites.

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European banks will repay 137.2 billion euros borrowed from the European Central Bank in its first three-year longer-term refinancing operation, the ECB said on Jan. 25.
The first tender, conducted on Dec. 21, 2011, saw 523 banks borrow 489 billion euros. Of these 278 banks are paying back the money.
The second tender, conducted on March, 1, 2012, saw 800 banks borrow 529.5 billion euros.
The ECB Governing Council announced on Dec. 8 2011 that LTRO borrowers counterparties had the option to repay, after one year, any part of the amounts that they were allotted in the longer-term refinancing operations settled on Dec. 21 2011 and March, 1, 2012, on any of the days in which the ECB performs its weekly main refinancing operations.
The STOXX 600 of European bank shares was at 178 euros as of 1130 GMT, up 0.5 percent.

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