(Updates with Libor fixings)
LONDON, Oct 3 (Reuters) - Key Euribor and Libor bank-to-bank rates hit fresh record lows on Wednesday, as the huge volume of cash pumped into the banking system by the European Central Bank and the prospect of further cuts in its interest rates extended a year-long slide.
The three-month Euribor rate
, traditionally the main gauge of unsecured bank-to-bank lending, fell to 0.218 percent from 0.220 percent. The equivalent Libor rate, settled in London at a record low of 0.14643 percent, versus Tuesday's 0.14857 percent
Shorter term one-week rates
ticked down to 0.082 percent after overnight Eonia rates also hit a record low of 0.087 percent.
Bank-to-bank lending rates have been in virtual free-fall since November last year when news broke that the ECB was going to flood the banking system with ultra-cheap, three-year cash.
The bank's decision in July to stop paying interest on overnight deposits has allowed the slide to continue by removing the natural 0.25 percent floor for the money market.
In contrast to euro rates, dollar-priced bank-to-bank Euribor lending rates
inched higher, with three-month rates up to 0.63769 percent from Tuesday's 0.63692 percent and overnight dollar rates edging up to 0.31846 percent from 0.31769 percent.
Three-month dollar Libor rates fixed at 0.35250 percent, down from 0.35400 percent on Tuesday.
The amount of excess cash in the euro zone banking system remains extremely high at 726 billion euros, according to Reuters calculations
With liquidity set to remain high for the foreseeable future money market experts are instead focused on whether the ECB could copy Denmark's example and start charging banks to deposit cash overnight with it.
It is an idea that has been floated by a number of ECB policymakers but it would be a complicated move and add extra complexity to an already dysfunctional money market.
For a package of graphics on the ECB, click on:
For graphic of euro zone liquidity levels click:
Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 0900 GMT.
* For a table of the latest Euribor fixings for terms of one week to one year, double click on
* For a table of the previous day's fixings of EONIA swap rates, which show market expectations for future overnight lending rates, double click on
* For graphs of historic Euribor and EONIA swap rates, right click on the links in angle brackets below, and select 'Related Graph' 1 week 2 week 3 week 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8 month 9 month 10 month 11 month 1 year
(Reporting by Marc Jones and Marius Zaharia; Editing by Susan Fenton)
Keywords: MARKETS EURIBOR/