FRANKFURT Jan 29 Euro zone banks offloaded some of their holdings of sovereign debt in December, with Spain, France and Italy seeing the biggest drops ahead of the European Central Bank's asset-quality review, ECB data showed on Wednesday.
Spanish banks sold 22.4 billion euros worth of government bonds in December, after a 10.6 billion euro decrease in November.
Italian banks also sold sovereign debt, recording a 15.7 billion euro decrease after a slight increase in November. At a market value of 410.9 billion, Italian banks' holdings of government bonds remain the largest in the euro zone.
France also saw a big drop, with banks selling 21.2 billion euros of sovereign debt. Adjusted for market value, French banks' sovereign debt holdings fell to 262 billion.
Portuguese banks reduced their government debt holdings by 4.3 billion euros, with the market value falling to 37.4 billion.
The ECB data does not give a break down of which countries' debt banks hold, but with a recent easing of market pressure on the governments struggling most with high debt, foreign and local investors are returning to euro zone bond markets.
(Reporting by Sakari Suoninen)