ECB extends swap deal with Bank until end-Sept 2012

FRANKFURT (Reuters) - The European Central Bank said on Thursday it had extended its 10 billion pounds swap arrangement with the Bank of England until September 28, 2012, a further sign of the ongoing pressure on banks from the euro zone debt crisis.

The current deal had been due to expire at the end of next month. Under the arrangement the ECB can lend sterling, provided by the Bank, to banks in the euro zone.

It was originally designed to ensure funding security for Irish banks which are heavily exposed to Britain.

The ECB has put in place temporary swap agreements at various intervals during the financial crisis. It currently also offers dollars on a weekly basis under a deal with the U.S. Federal Reserve.

Unlike the dollar facility, the ECB does not publish figures if sterling funds are taken. The operations are run on an ad-hoc basis by national central banks, rather than centrally by the ECB's market operations department in Frankfurt.

With interbank markets shut for troubled institutions, Irish banks are almost entirely dependent on ECB liquidity. At present they and account for around a fifth of all money lent by the central bank.

(Reporting by Marc Jones; editing by Patrick Graham)