Overnight deposits at ECB steady, bond buys rise

 

Overnight bank deposits at the European Central Bank inched up, data showed on Tuesday, although commercial banks are still holding on to a lot of the extra cash the ECB has pushed into markets to encourage lending.

The amount of covered bonds bought by the ECB and national central banks inched up, data also showed.

Banks deposited 145.042 billion euros at the ECB overnight on Aug. 31, slightly up on the 142.57 billion euros deposited previously.

Bank borrowing from the ECB's overnight account rose slightly to 115 million euros from 108 billion.

The amounts parked at the ECB's deposit facility have been high since it flooded money markets with almost half a trillion euros in one-year funds at the end of June.

The ECB and the 16 euro zone national central banks are also buying euro-denominated covered bonds debt backed by a pool of assets such as mortgage loans that remain on the issuing bank's balance sheet over the next year, from both primary and secondary markets.

The ECB said the total purchased had risen to 9.196 billion euros from 8.786 billion previously. It means the ECB is now roughly 15 percent through the 60 billion euros it has earmarked to spend.

The amounts are published on Reuters information page ECB59 after the purchases settle, which takes 2-3 days.

The ECB released a report in early August about its bond purchases in July, almost two-thirds of which were made on secondary markets.