Banks repay ECB 12.5 bln euros of crisis loans
FRANKFURT, March 1 (Reuters) - Banks will next week repay the European Central Bank 12.495 billion euros ($16.34 billion) of two 3-year loans they took a year ago, a drop in the payback rate that shows they prefer to hold surplus cash in case financial markets clog up again. The ECB said on Friday 66 banks had decided to repay funds from the loans on March 6, with 4.176 billion euros repaid from the first one and 8.319 billion from the second. The amounts were slightly above a Reuters poll on Monday, which estimated banks would return 3 billion euros of the first round of cheap loans and 5 billion in of the second. The loans are known as LTROs (long-term refinancing operations). The ECB lent banks a total of more than 1 trillion euros in the twin 3-year, ultra-cheap lending operations in December 2011 and February 2012 - a ploy that ECB President Mario Draghi said "avoided a major, major credit crunch". Banks took 489 billion euros in the first LTRO and 530 billion in the second. In January, banks opted to repay the ECB 137.2 billion euros of the first of the twin loans at the first opportunity to so, handing more cash back early than expected, which led to higher market interest rates. In the first opportunity to pay back funds from the second LTRO, banks returned 61.1 billion euros to the ECB. Announcements on details of LTRO early repayments (bln euro) First LTRO (Dec. 2011) Second LTRO (Feb. 2012) Jan. 25 2013 137.1591 Feb. 1 2013 3.4840 Feb. 8 2013 4.9925 Feb. 15 2013 3.7900 Feb. 22 2013 1.7440 61.09235 March 1 2013 4.1760 8.31873 ($1 = 0.7649 euros) (Reporting by Sakari Suoninen)
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.