Europe Economy

Overnight Borrowing from ECB Drops to Zero

European Central Bank
Hannelore Foerster | Bloomberg | Getty Images

Commercial banks took no overnight emergency funds from the European Central Bank, ECB data showed on Monday, pointing to a consistent improvement in money market access this year.

Banks are reluctant to use the ECB's instant access facility - also known as its 'emergency' window - because of the cost. The ECB charges 0.75 percentage points more interest to use the facility than for normal funding, though its use still increased in the previous two years as interbank markets dried up.

Prior to the beginning of the year, the last time the facility went untapped was August 28, 2011, but the latest data showed the facility going unused for the fifth time already this year.

"It's a sign that there is some improvement on money markets," Nordea analyst Jan von Gerich said, noting that bond spreads within the euro zone have also come down and bank deposits have stabilised in the bloc's crisis-hit countries.

"Periphery banks in general seem to have a somewhat improved access to markets as well," von Gerich said.