Overnight borrowing from ECB jumps, bond tally ticks up

The amount of cash banks borrowed from the European Central Bank's emergency overnight facility jumped, data showed on Thursday, as its covered bond purchase plan continued to inch forward.

The ECB also said commercial banks deposited 71.9 billion euros ($107.4 billion) at the 16-country bloc's central bank overnight, compared with 79.950 billion previously.

There was a sharp increase of the use of its emergency overnight loans. Banks borrowed 1.5 billion euros, up from just 86 million previously.

The ECB's 60 billion euro covered bond buying programme also continued to make progress. The total purchased inched up to 18.871 billion euros from 18.638 billion euros, leaving the ECB almost a third of the way through its plan.

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

It dumped a further 75 billion euros of one-year money into the system in the second installment at the beginning of the month.

The ECB and the 16 euro zone national central banks are 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.