Oct. 3 (Bloomberg) -- The European Central Bank said financial institutions increased overnight deposits to the highest in more than a year.
Banks parked 199.6 billion euros ($266 billion) with the ECB on Sept. 30, up from 161.4 billion euros a day earlier, according to data published by the Frankfurt-based central bank today. That’s the highest since July 2010. Overnight borrowing at the marginal rate of 2.25 percent almost doubled to 1.4 billion euros from 765 million euros, it said.
Banks are borrowing more from the ECB in regular refinancing operations as the region’s debt crisis intensifies, leaving lenders with excess cash that they return to the central bank in overnight deposits rather than pass it on to other institutions. Banks tend to front-load their ECB borrowings to ensure they have enough cash to meet reserve maintenance requirements.
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