European banks to repay ECB crisis cash early

 
City A.M. Reporter
Banks that received loans to keep them afloat during the Eurozone crisis will repay more than €130bn (£111bn) of loans to the European Central Bank (ECB) next week in a sign that parts of the financial system are returning to health.

The ECB made more than €1 trillion of cheap three-year loans to banks to avoid a major credit crunch.

The central bank said today that 278 banks would repay a total of €137.2bn of loans they had borrowed, although it did not name them.

The loans, which were given in twin lending operations in December 2011 and February 2012, will be repaid on 30 January. A total of 523 banks tapped the first of the two long-term loans, known as LTROs, just over a year ago.

The banks typically borrowed cash to fund their loan books if they were struggling to access cheap funding, or as an insurance policy if the debt crisis worsened.