FRANKFURT: European banks took up almost twice the amount of cheap loans that analysts had predicted in a second round of European Central Bank refinancing, according to data released Thursday.
The ECB announced that it had agreed to lend 45.3 billion euros ($51 billion) to 249 banks in the eurozone under the so-called TLTRO 2 programme, under which financial institutions are expected to quickly lend the funds to businesses and households to provide a much needed boost to economic growth, reports AFP.
The amount was lower than the first round in June, which came just before Britain voted to leave the European Union and lenders were hesitant about the economic outlook.
However, it significantly higher than analysts’ forecasts. ING Diba bank had predicted a figure of 25 billion euros.
Subtracting some of the loans, used by banks to immediately pay back previous debts to the central bank, the ECB loaned out a net amount of around 34 billion euros.
That was a slight increase over the net amount in the first round of TLTRO 2 lending in June.
While June saw the ECB issue almost 400 billion euros in loans to 514 banks, the net impact on the financial system was smaller as banks used around 370 billion of that cash to pay back old debts—leaving a net figure of 31.42 billion flowing outwards.