Lending to tighten as ECB loans top €44.1bn
The credit crisis has increased the reliance of eurozone banks on the ECB for funds. At the end of July financial institutions operating in Ireland had outstanding borrowings of €44.12bn from the ECB, up from €39.4bn at the end of December 2007. This is a 102% increase on the €21.85bn Irish banks owed the ECB in July of 2007. This compares with Spain whose banks had borrowed a record €49.4bn in July.
It is expected the ECB will announce changes to the rules governing its money-market auctions by tightening the collateral framework that underpins the loans it gives to eurozone banks.
