Spanish Banks increase borrowings from ECB

Spanish banks’ net borrowings from the European Central Bank in August rose to €69.91bn, up from €52.05bn in July, according to the latest data from the Bank of Spain.

While the banks’ net borrowing was the highest monthly total so far this year, it is well below the record €130.2bn registered in July 2010 when Spain’s banks came under intense pressure as the eurozone financial crisis spread.

The ECB has made funds available for banks currently facing difficulties in raising funds from the wholesale capital markets.

Spanish banks’ use of ECB funds represents about 2% of banking assets, compared with about 8% for banks in Portugal and 21% for Greek banks, according to Bloomberg.

Separately, the Spanish Treasury returned to the sovereign debt market on Thursday, raising €3.95bn from three different types of bonds maturing in 2019 and 2020, at lower rate of interest for the fourth consecutive debt auction, the Spanish news agency EFE reported.

The gap between Spanish and German 10-year borrowing costs narrowed four basis points to 355 on Thursday.

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