FRANKFURT (Reuters) - Euribor bank-to-bank lending rates rose on Monday after the U.S. central bank’s signal it will end easy money cast doubts over further support measures from the European Central Bank.
Federal Reserve Chairman Ben Bernanke said last Wednesday the U.S. economy is expanding strongly enough for the central bank to begin slowing the pace of its bond-buying stimulus later this year.
Such a step towards an exit from accommodative policies is still far off in Europe, where the ECB kept its main refinancing rate unchanged at 0.5 percent on June 6. ECB President Mario Draghi said then the Governing Council had discussed a raft of options but decided to leave them on the shelf.
Last Tuesday, Draghi reiterated in a speech in Israel that the ECB stood ready to act if necessary, stressing that the transmission of its monetary policy was improving and it had regained better control of monetary conditions.
The three-month Euribor rate, traditionally the main gauge of unsecured bank-to-bank lending, rose to 0.221 percent from 0.216 percent.
The six-month rate increased to 0.341 percent from 0.333 percent and the one-week rate rose to 0.104 percent from 0.102 percent. The overnight Eonia rate rose to 0.084 percent from 0.082 percent.
Dollar-priced bank-to-bank Euribor lending rates were firmer, with three-month rates rising to 0.46000 percent from 0.45667 percent and one-week rates up at 0.29222 percent from 0.28556 percent.
Excess liquidity in the euro zone banking sector stood at 257 billion euros, still high enough to keep market rates below the ECB’s refinancing rate.
Draghi said in February that he did not expect market rates to face upward pressure until excess liquidity in the banking sector fell below 200 billion euros.
Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 1000 GMT.
Reporting by Frankfurt newsroom; Editing by Catherine Evans