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Euro, Stock Markets Steady As Banks Borrow Less Than Feared From Ecb

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http://www.telegraph.co.uk/finance/markets/7863028/Euro-stock-markets-steady-as-banks-borrow-less-than-feared-from-ECB.html

The ECB lent banks €131.9bn (£107.7bn) in three-month funds on Wednesday in an auction that was seen by economists as a test of the sector's health.

With the amount below the €150bn-€250bn expected, concerns about bank finances which have rocked stock markets and weighed on euro this week were temporarily eased.

Europe's single currency rose nearly a cent against sterlng, with one pound buying €1.2248. London's FTSE 100 rose 0.7pc but remained below 5,000. German and French bourses were up 0.4pc and 0.5pc respectively.

Warning signal

The ECB said 171 banks borrowed funds at a flat rate of 1pc in the operation. High demand would have sent a warning signal since the ECB is charging a relatively high interest rate compared to market rates.

Banks in countries including Greece, Spain and Portugal are increasingly dependent on the ECB for funding as they struggle to borrow from others due to concerns over debt and public finances.

However, it was still the highest ever borrowed in a three-month operation.

Gilles Moec, an economist at Deutsche Bank, said: "It's definitely a good sign and means there is still some interbank lending occurring within the European money market.

"We still have to wait for tomorrow to get the full picture."

On Thursday bank will have to repay €442bn in 12-month funds - the one-year loan's were the ECB's first and introduced to fight the financial crisis last year. They are not set to be renewed.

Did they intentionally over estimate the amount that would need to be borrowed so the actual figure looks better?

Market sentiment appears insane, everythig is fine because the banks only needed €131.9bn, €18bn less than expected!!!

Thankfully it's contained and there will be no contagion.

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Yep, panic over.

Move along, there is nothing to see here.

The Euro is safe, the future is rosy.

Ah, and debt is wealth.

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Wasn't the worry that banks would need to borrow in today's 3 months window to repay their 1 year money which is due tomorrow?

So the banks may not be as badly off as feared?

I love this bit

The ECB said 171 banks borrowed funds at a flat rate of 1pc in the operation. High demand would have sent a warning signal since the ECB is charging a relatively high interest rate compared to market rates.

Like 1 pc can ever be thought of as high

Edited by oldsport

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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