The European Central Bank (ECB) has said a large number of eurozone lenders are planning to repay a big proportion of cheap ECB loans early. The money has been granted to avoid a credit crunch.
The European Central Bank (ECB) announced on Friday that lenders in the 17-member euro area would pay back early 137.2 billion euros ($183 billion) of the huge amount of the cheap, three-year emergency loans they'd received from the ECB about a year ago.
Under the ECB's special long-term refinancing operations, which were launched to avert a looming credit crunch in the eurozone, lenders had the option of repaying any part of the money after just one year.
All in all, the Frankfurt-based central bank provided over one trillion euros of cheap loans in two batches, aiming to relieve stress on banks at the height of the debt crisis.
Next Wednesday was the first day when repayments of whatever size could be started, the ECB noted.
It reported that 278 lenders had already signaled their willingness to give back some of the money early.
Conditions for securing ECB loans had been extremely favorable. Apart from the fact that credits were for the first time granted for a period of over one year, the interest rate stood at an all-time high. In December 2011, the yield was 1.0 percent, before dropping even further to 0.75 percent in July 2012.
hg/hc (AP, AFP)