Euribor rates hit record low on liquidity glut

FRANKFURT, Oct 8 (Reuters) - Key Euribor bank-to-banklending rate hit fresh record lows on Monday, pushed down bylarge amounts of excess liquidity sloshing around in the moneymarkets.

The three-month Euribor rate

, traditionallythe main gauge of unsecured bank-to-bank lending, fell to 0.214percent from 0.215 percent.

Shorter term one-week rates

remained at 0.081percent while overnight Eonia ratesdipped to 0.093percent from 0.095 percent.

Bank-to-bank lending rates have been in virtual freefallsince November last year when news broke that the ECB was goingto flood the banking system with ultra-cheap, three-year cash.

The bank's decision in July to stop paying interest onovernight deposits has allowed the drop to continue by removingthe 0.25 percent floor for the money market.

Dollar-priced bank-to-bank Euribor lending rates

also inched down, with three-monthrates falling to 0.60923 percent from 0.61750 percent.

The amount of excess cash in the euro zone banking systemremains extremely high at 711 billion euros according to Reuterscalculations


With it set to remain high for the foreseeable future, moneymarket experts are instead focused on whether the ECB could copyDenmark's example and start charging banks to deposit cashovernight with it.

However, after initial interest in the idea, somepolicymakers have expressed reservations about it.


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 ofthe European Union (FBE) shortly after 0900 GMT.

* For a table of the latest Euribor fixings for terms of oneweek to one year, double click on

* For a table of the previous day's fixings of EONIA swaprates, which show market expectations for future overnightlending rates, double click on

* For graphs of historic Euribor and EONIA swap rates, rightclick on the links in angle brackets below, and select 'RelatedGraph'1 week2 week3 week1 month2 month3 month4 month5 month6 month7 month8 month9 month10 month11 month1 year

(Reporting by Frankfurt newsroom)

((frankfurt.newsroom@reuters.com)(+49 69 7565 1209))