November 28, 2012 / 9:42 AM / 5 years ago

Spanish banks shed govt bonds in Oct -ECB

FRANKFURT, Nov 28 (Reuters) - Spanish banks reduced their government bond holdings in October, while Italian banks bought more sovereign debt, European Central Bank data showed on Wednesday as tension in financial markets eased after the announcement of the ECB’s new bond-buying plan.

Spanish banks trimmed their government bond holdings by 5.2 billion euros after an 8.8 billion increase in September. Their total sovereign holdings, adjusted by market value, fell to 253.7 billion euros in October.

Meanwhile, Italian banks bought more securities issued by euro zone governments, spending a net 10.5 billion euros and their total value rising to 364.2 billion.

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 reduced their holdings of government debt by 0.4 billion euros, the data showed, while Greek banks cut theirs by 0.08 billion euros. (Reporting by Paul Carrel and Eva Kuehnen)

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