A Record 3 Trillion Euros Is Looking for a Home
- ECB’s short-term funding rate falls to lowest level on record
- Banks took 174.5 billion euros of cheap ECB loans last week
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Banks rushing to benefit from the European Central Bank’s cheap-loans facility have helped push excess cash in the euro area economy past 3 trillion euros ($3.5 trillion) for the first time.
Financial institutions increased the amount of money parked with the ECB by 1 trillion euros in under six months to 3.08 trillion euros, according to the central bank’s latest update. It’s due in large part to the ECB’s targeted longer-term refinancing operations, known as TLTROs, that charge interest rates of as low as minus 1% to aid the economic recovery from the pandemic.