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Record Break Cash Deposit By Euro Zone Banks

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By Author: Justin Henry
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The European Central Bank has filled by the deposits by euro zone banks. The amount of cash deposited hit a fresh record on Friday. Nearly €776.9bn has been deposited overnight in the ECB deposit facility by the lenders across Europe – the most since the single currency was founded in 1999. Interestingly they earn just 0.25 per cent – on Thursday, up by nearly two-thirds or €300bn from the previous day. Record amounts of cash by the nervous bank in the European Central Bank despite signs that the crisis in the region is easing. But the easy flood of cheap cash is indicating to the trouble in coming days.
The sum equates to three-quarters of the cheap money the ECB has pumped into the European banking system in emergency loans. On Wednesday 800 banks, under the ECB are longer-term refinancing operation, took €529.5bn of three-year loans at 1 per cent. It was the second time the ECB has offered such loans, and takes the total lifeline to above €1trillion after 523 banks took €489billion in December. According to analysist estimation about €310bn of new liquidity was created.
ECB chief Mario Draghi ...
... encouraged The Long Term Refinancing Operation (LTRO) which has been widely praised, including by the International Monetary Fund, for helping to restore confidence in the euro zone and averting a major credit crunch. Central bankers play down the significance of any rise in deposits According to ECB it is an automatic side-effect of the ECB increasing its balance sheet through the LTRO and does not show that banks are opting for safety first. As per chief economist at Standard Chartered, Gerard Lyons, there has been a ‘significant improvement’ in sentiment on the financial markets since the ECB launched the LTRO. Need cash urgently then apply with text loans and get quick funds to meet your urgent needs.
As one coin has its two sides, critics have warned that the easy flow of cheap funds will create troubles for future. Particularly if European banks are not strong enough to pay the money back in three years. The ECB’s deposit facility is taken as a sign of market tension because through interbank market banks could earn more. However they prefer the safety of parking their cash at the central bank. No doubt LTRO has decline the prospect of bank failure due to financing problems and for this it has been appreciated by various bankers and investors.


Justin Henry is financial advisor and shares he best views on text loans @ http://www.textloansnow.co.uk/ , instant text loans and mini text loans

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