Wires

UPDATE 1-Euribor rates hit fresh low on liquidity glut

(Updates with Libor fixings in third paragraph)

FRANKFURT, Oct 9 (Reuters) - Key Euribor bank-to-banklending rates hit fresh record lows on Tuesday, pushed down bylarge amounts of excess liquidity sloshing around in moneymarkets.

The three-month Euribor rate

, traditionallythe main gauge of unsecured bank-to-bank lending, fell to 0.212percent from 0.214 percent. Equivalent Libor rates, set by asmaller panel of banks in London, fixed at 0.14357 percent

from 0.14571 percent.Shorter term one-week ratesremained at 0.081percent. Overnight Eonia ratesbucked the downtrend andedged up to 0.094 percent from 0.093 percent.

Bank-to-bank lending rates have been falling since Novemberlast year when news broke that the ECB was going to flood thebanking system with ultra-cheap, three-year cash.

The bank's decision in July to stop paying interest onovernight deposits has allowed the fall 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 0.60846 percent from 0.60923 percent.

The amount of excess cash in the euro zone banking systemremains extremely high at 717 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.

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

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For a package of graphics on the ECB, click on:

For graphic of euro zone liquidity levels click:

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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; Editing by Catherine Evans)

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

Keywords: MARKETS EURIBOR/