The struggling Eurozone country’s lenders increasingly have to tap the ECB’s funds as they are frozen out of the interbank funding market due to banks’ reluctance to lend to each other.
Net borrowing also hit a fresh high of €287.8bn, the Bank of Spain’s figures showed. The net figures remove the average amount that banks stash in the ECB’s overnight deposit facility.
The rise in borrowing “conveys the severity of the predicament some banks found themselves in ahead of last weekend’s bailout announcement,” commented ING’s Martin van Vliet.
“Banks in Spain are now by far the most dominant users of ECB funding, accounting for about 30 per cent of outstanding ECB liquidity,” he said, yet added that, relative to size, Portuguese, Irish and Greek banks borrow more.