“ The ECB raised its price on bank deposit from zero to 0.75% final week in a bid
to extend borrowing costs in the financial system and cool off price development.
But lenders have not absolutely taken that hike on board and they're lending to
each other at simply 0.66%, the one-month swap on the ECB's ESTR
overnight price showed on Thursday. FRANKFURT, Sept 16 (Reuters) - Euro zone banks are holding onto trillions of euros in multi-12 months loans from the
European Central Financial institution, data showed on Thursday, in a headache for a central bank that needs to mop up money to battle runaway inflation. Analysts
at ING said one possibility can be to cease remunerating excess reserves in proportion to
a bank's TLTRO steadiness or change the terms of the loans -- although they cautioned these options would hit Italian banks
disproportionately. The reasons aren't hard to know: banks could make a guaranteed profit
on that cash, which they'd borrowed when rates were lower, by simply parking it on the
ECB and so they're unlikely to search out such low-cost funding anywhere
else available on the market. ”