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Euribor rates tick up on debt crisis tensions
December 5, 2011 / 10:32 AM / in 6 years

Euribor rates tick up on debt crisis tensions

FRANKFURT, Dec 5 (Reuters) - Key euro-priced
bank-to-bank lending rates rose on Monday as tensions on the
interbank market, highlighted by a jump in borrowing from the
European Central Bank, offset expectations of an interest rate
    The recent jump in both borrowing from and overnight
deposits at the ECB have highlighted the freeze in traditional
interbank lending markets, which have tightened up over fears
about the euro zone debt crisis, forcing banks to make greater
use of the ECB's limit-free loans.	
    Overnight deposits hit a gigantic 333 billion euros on
Monday (for story click ), the highest since June
2010, a point in time when banks had the specific issue of
paying back the first of three huge ECB one year loans.    	
    Three-month Euribor rates, traditionally the 
main gauge of unsecured interbank euro lending and a mix of 
interest rate expectations and banks' appetite for lending, rose
in response to 1.470 percent from 1.469 percent.  	
    Six-month rates inched up to 1.703 percent
from 1.699 percent while 12-month rates rose to
2.036 percent from 2.033 percent.  	
    Shorter-term one-week rates -- most heavily
influenced by excess liquidity, which fell slightly to 306
billion euros according to Reuters calculations --
ticked up to 0.895 percent from 0.892 percent.   	
    Overnight rates eased to 0.725 percent from 0.736
    There is a growing pack of banks now locked out of open
funding markets and reliant on the ECB. 	
    Last week, 192 institutions borrowed a combined 265.5
billion euros of 7-day funding from the central bank, a new
2-1/2 year high. Another 38.6 billion euros was taken in
longer-term 3-month loans.	
    ECB President Mario Draghi said last Thursday the central
bank was aware of the difficulties facing banks and that it
would ensure price stability against threats in either
direction, also warning the economic outlook had worsened.	
    The ECB has already reinstated some of its most potent
crisis-fighting tools in recent months in a bid to calm the
escalating tensions and is currently mulling the possibility of
extending liquidity loans to up to three years, people familiar
with the matter say. 	
    It is also expected to cut its main interest rate for the
second month running, a move that would take it back to a record
low of 1.0 percent or lower if the bank decides a 50 basis point
cut is required.	
   For graphic of EONIA trading volumes click:       
   For graphic of euro zone liquidity levels click: 	
   For graphic of ECB government bond buying:	
    Euribor rates are fixed daily by the Banking Federation of 
the European Union (FBE) shortly after 1000 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 
    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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