Spanish, Italian banks buy govt bonds in Nov -ECB

FRANKFURT Thu Jan 3, 2013 4:14am EST

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FRANKFURT Jan 3 (Reuters) - Spanish and Italian banks bought government debt in November, European Central Bank data showed on Thursday as tension in financial markets eased in the wake of the announcement of the ECB's new bond-buying plan.

Spanish banks added 4.2 billion euros to their government bond holdings after a 5.2 billion decrease in October. Their total sovereign holdings, adjusted by market value, rose to 259.4 billion euros.

Meanwhile, Italian banks spent a net 2.1 billion euros on government bonds, with their total value rising to a record-high level of 370.1 billion euros.

The ECB data do not break down which countries' debt banks hold, but the figures give a good picture of how much of the 1 trillion euros the ECB has pumped into the market in twin 3-year liquidity operations is finding its way into the government bond market.

Portuguese banks also added to their holdings of government debt, by 728 million euros, the data showed, while Greek banks' sovereign debt holdings were virtually unchanged. (Reporting by Sakari Suoninen)

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