Euribor rates jump after early 3-yr loan repayments
FRANKFURT, Jan 28 (Reuters) - Euribor bank-to-bank lending rates jumped on Monday after banks decided to repay early more than expected of crisis loans they took from the European Central Bank just over a year ago. The ECB said on Friday that 278 banks would return a total 137.2 billion euros ($183 billion) of the three-year loans they took in December 2011, making use of the earliest repayment opportunity on Jan. 30. A Reuters poll had forecast a return of 100 billion euros. The larger-than-expected repayment is a sign that at least parts of the financial system are returning to health. Banks took more than 1 trillion euros of ultra-cheap, three-year loans, or Long-Term Refinancing Operations, from the ECB in two separate offers roughly a year ago. The ECB used these LTROs to try to restore order to Europe's crisis-hit financial system. Banks can repay the money early on a voluntary basis weekly from now on and while the heavy oversupply of ECB cash has long depressed the rates banks charge each other on lending markets, a significant repayment could drive rates higher. Reuters calculations show there is currently around 581 billion euros of excess liquidity sitting in euro zone banks. On Friday, three-month Euribor rates, traditionally the main gauge of unsecured bank-to-bank lending, rose to 0.224 percent from 0.214 percent. The six-month rate rose to 0.370 percent from 0.356 percent while the one-week rate inched higher to 0.082 percent from 0.081 percent. The overnight Eonia rate rose to 0.071 percent from 0.068 percent. Dollar-priced bank-to-bank Euribor lending rates were lower, with three-month rates falling to 0.48455 percent from 0.49000 percent and one-week rates dropping to 0.32909 percent from 0.33364 percent. Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 0900 GMT. * For a table of the latest Euribor fixings for terms of one week to one year, double click on * For a table of the previous day's fixings of EONIA swap rates, which show market expectations for future overnight lending rates, double click on * For graphs of historic Euribor and EONIA swap rates, right click on the links in angle brackets below, and select 'Related Graph' 1 week 2 week 3 week 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 1 year (Reporting by Frankfurt newsroom)
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